Saudi Arabia’s bourse made its largest one-day decline in two weeks yesterday as some investors reduced their market exposure ahead of the first quarter earnings in early April, while most other regional markets gained.
“People are trying to speculate on results - this is creating uncertainty,” said Abdullah Alawi, assistant general manager and head of research at Aljazira Capital.
Alawi added that analysts are biased towards companies that will benefit from local consumer spending, with retail, cement, telecom and real estate sectors all seen performing better than industrial stocks.
The kingdom’s bourse lost 0.6% in its largest daily decline since February 26, but it continues to trade in a tight range seen since mid-January.
Banks led declines with Riyad Bank and Saudi Investment Bank losing 3 and 3.9% respectively.
The petrochemical sector also declined, with Saudi Kayan Petrochemical losing 1.3%.
Elsewhere, UAE markets extended gains with Dubai’s index rising 0.5%, up for a fourth session, and Abu Dhabi’s benchmark up 0.4%, its third straight gain.
In Oman, the bourse climbed 0.8% to a 21-month high, as gains on global markets further buoyed a positive sentiment in the economy.
Banks led gains, with National Bank of Oman and Bank Sohar rising 1.4 and 1.7% respectively.
The Dow Jones index is trading at a record high and the Standard & Poor’s 500 benchmark is back at pre-crisis levels and near the record high hit in October 2007. “The current rally will continue as long as global sentiment is strong - the growth in the local economy will support,” said Adel Nasr, United Securities’ brokerage manager. “If Q1 results are good, we can see the rally continue till year-end.”
Oman’s economy is forecast to grow 4.4% in 2013, according to a Reuters poll conducted in January.
Elsewhere, Kuwait’s bourse extends gains, with the index advancing 0.7% to its highest close since February 2011, while Bahrain’s index gained 0.1% to 1,109 points.
Egypt’s index ticked up 0.03% to 5,405 points.