Stock markets in the Gulf fell yesterday, weighed down by weak oil prices and lacklustre second-quarter corporate results over the last few weeks, while Egypt’s main index pulled back on profit-taking after a strong run.
The Qatar index fell 0.5% to 10,604 points.
Riyadh’s index declined 0.5% to a fresh 16-week closing low of 6,302 points as the petrochemical sector dropped 0.9%.
The September Brent oil contract settled at $42.46 a barrel on Friday, down 0.6% on the day and 14.5% lower on the month.
Some major companies which reported weak earnings last week continued their downtrend with major food group Savola sinking 5.0% to 34.20 riyals, its lowest close since January 24.
On Thursday the company reported a 43.2% drop in second-quarter net profit and trimmed its dividend. But Emaar the Economic City, builder of the King Abdullah Economic City, rose 2.6%.
The company reported a 58% jump in second-quarter net profit to 79mn riyals ($21.1mn), though it attributed the rise mainly to cancellation of a rental contract and to changes in infrastructure cost estimates for industrial land.
Middle East fund managers have become more bullish towards equities in the region over the past month because of flows of money into emerging markets globally, but they remain wary of the direction of oil prices, a monthly Reuters poll found.
In Dubai, the main index lost 1.0% but ended the month with a 5.2% gain.
Telecommunications operator du dropped 3.6% after it reported an 11.3% fall in second-quarter net profit to Dh445.4mn ($121.3mn), at the low end of expectations; analysts at EFG Hermes and SICO Bahrain had forecast Dh433.8mn and Dh487.1mn respectively.
Du needs to regain momentum in the prepaid mobile market if it is to counteract higher government taxes and halt an earnings slump, chief executive Osman Sultan said yesterday.
But courier firm Aramex jumped a further 2.5% on the announcement that founder Fadi Ghandour had sold all his shares in Levant Logistics Holdings, which held his 9.9% stake in Aramex.
The sale was part of a move by Dubai entrepreneur Mohamed Alabbar, who has led two investor groups in buying a combined 16.45% stake in Aramex in order to build an e-commerce platform across the Arab world, according to a source familiar with the matter.
In Abu Dhabi the index shed 0.4% as Aldar Properties, which is due to report earnings this week, fell 1.0% and Abu Dhabi National Energy slumped 7.7%.
Egypt’s main index ended five straight days of gains and shed 0.6% to 7,983 points as initial euphoria over Cairo’s effort to secure an International Monetary Fund loan programme cooled.
Mohammed al-Najjar, head of research at Cairo-based El Marwa Brokerage, said the index was likely to fall back to 7,900 points but that any positive developments in the IMF talks would be a positive catalyst for equities.
Two-thirds of traded Egyptian shares declined on Sunday with Palm Hills Development dropping 1.9%.
Elsewhere in the Gulf, the Kuwait index edged down 0.2% to 5,451 points, the Oman index lost 0.2% to 5,844 points and the Bahrain index fell 0.4% to 1,156 points.