STC, the Gulf’s biggest telecommunications operator by market value, tumbled 5.6% yesterday after it posted an 8.7% fall in second-quarter profit
Reuters/Dubai
Gulf stock markets were narrowly mixed yesterday as a series of disappointing corporate earnings reports, especially in the telecommunications sector, offset the positive impact of improving global sentiment.
Saudi Arabia’s main index inched down 0.1% as blue chip Saudi Telecom (STC) tumbled 4.5%.
STC, the Gulf’s biggest telecommunications operator by market value, tumbled 5.6% after it posted an 8.7% fall in second-quarter profit which it blamed on rising costs.
The firm made a net profit of 2.56bn riyals ($683mn) in the quarter. Analysts polled by Reuters had on average forecast 2.94bn riyals.
Al Tayyar Travel Group dropped 2.0% after reporting an 8.8% rise in second-quarter net profit, even though its earnings were broadly in line with the estimate of analysts at Saudi Fransi Capital.
Another heavyweight stock, Makkah-focused property developer Jabal Omar, rose 1.3% after announcing it had been awarded a 1.56bn riyal construction contract for one of its projects.
Petrochemicals giant Saudi Basic Industries edged up 0.7% in line with oil prices, which ended a long streak of losses on Wednesday and extended gains yesterday.
Dubai’s bourse edged up 0.3%, supported by Dubai Islamic Bank which jumped 2.7%, extending gains after it beat expectations with a 35% rise in second-quarter net profit this week.
But Dubai Investments dropped 2.7%. The firm, which has interests in property, manufacturing, healthcare and education, posted a 58.6% drop in second-quarter net profit on Wednesday, which it blamed on a one-off gain in the prior-year period.
Telecommunications company du, which has yet to report second-quarter earnings, fell 0.6% after several other Gulf telecommunications operators posted declining profits and missed analysts’ estimates.
Abu Dhabi’s index climbed 0.3% as Etisalat, another telecommunications firm, added 1.1%. The stock had tumbled 5.4% on Wednesday after Etisalat reported a 40% drop in second-quarter net profit.
Egypt’s stock index rose 1.1% after the country’s army finished building the New Suez Canal, a project that Cairo sees as a major chance to stimulate an economy suffering double-digit unemployment.
The country’s top cigarette maker Eastern Company was the main support, surging 4.4%. The firm said this week its net profit for the last fiscal year rose to 1.083bn Egyptian pounds ($138mn), a 19.2% increase.
Elsewhere in the Gulf, Kuwait’s index added 0.1% to 6,254 points; Oman’s index inched up 0.04% to 6,558 points, while Bahrain’s index was flat at 1,332 points.
