DUBAI: Saudi Arabia’s largest listed company Saudi Basic Industries Corp (SABIC) fell from a 18-month high yesterday, weighing on the kingdom’s bourse after its quarterly earnings matched estimates, while most other Middle East markets rose.
Many investors had expected a positive surprise from SABIC after two of its subsidiaries posted estimate-beating quarterly profits earlier this month. SABIC’s third quarter profit rose 2.5 percent to SR6.47bn ($1.73bn). Analysts on average forecast its profit would be SR6.4bn.
“We had seen signs of improvement in petrochemical product prices in Q3 2013,” said Sleiman Aboulhosn, investment analyst at ING Investments. “Overall, results were good and we expect improving demand from Asia and restocking to underpin earnings growth in Q4 2013.” Shares in SABIC fell 2.4 percent.
Al Tayyar Travel Group tumbled 6.8 percent to its lowest close in October. The firm said its third-quarter net profit rose 6.8 percent to SR214.9m, below one analyst’s forecast. Saudi Arabia’s index slipped 0.6 percent, easing from Thursday’s two-month high.
In Dubai, Emaar Properties rose 1.8 percent, hitting a five-year intraday high after its quarterly profit rose 50 percent to comfortably beat estimates.
Emaar’s earnings added weight to signs of recovery in the emirate’s property and tourism sectors.
“It’s very positive signal that the growth is there and it’s massive,” said Sebastien Henin, portfolio manager at The National Investor. “Institutional investors who were doubtful about Dubai’s property and tourism recovery will come back in the game - it will take a few days or weeks for them to allocate funds to Emaar.”
Dubai’s index rose 0.5 percent to a five-year peak. Abu Dhabi’s benchmark added 0.2 percent.
In Cairo, the benchmark index climbed 0.4 percent after the UAE signed an agreement for $4.9bn worth of aid to Egypt. The index closed below the intraday peak of 6,233 points — its highest level since January 2011.
It has rallied 37 percent since June 24’s 12-month low, with shares rebounding following the army’s ousting of former President Mohamed Mursi, whom many blamed for mismanaging the country during his one-year rule. Heavyweight Commercial International Bank rose 1.5 percent and Upper Egypt Construction rose 4.4 percent.
The army-backed government has announced spending plans worth EP29.6bn ($4.3bn) to rejuvenate the economy, and while some analysts have doubted Egypt’s ability to fund the stimulus package and cut its budget deficit, the UAE aid — most but not all of which was previously announced - could help plug some of the gaps.
Bullish global markets supported regional sentiment. World equity indexes were near five-year highs on Friday as major US technology companies propelled Wall Street to another day of gains, sending the S&P 500 index to close at a record. Reuters
