Middle-east Arab News Opinion | Asharq Al-awsat

SABIC Q1 helps Saudi rebound; poll woes weigh on Egypt | ASHARQ AL-AWSAT English Archive 2005 -2017
Select Page

DUBAI, (Reuters) – Bellwether Saudi Basic Industries Corp (SABIC) made its largest daily gain in nearly 11 months on Tuesday after its earnings beat forecasts, helping lift the bourse from seven-week lows, while Egyptian shares fell on election uncertainty

SABIC jumped 4.3 percent to 102.25 riyals in its largest daily gain since March 2011.

SABIC said first-quarter net profit fell 5 percent to 7.27 billion riyals ($1.94 billion) from a year earlier on higher input prices. Analysts polled by Reuters on average forecast the firm would post a profit of 6.7 billion riyals.

“The market has already beaten down the stock on result nervousness,” Riyad Capital wrote in a note.

“Trading at 9.5 times 2012 estimated earnings with a dividend yield of 5.6 percent, we believe the stock will reverse its underperformance and we continue to recommend a ‘buy”‘ rating,” Riyad Capital added, raising its target on SABIC to 121.50 riyals from 117 riyals.

The index climbed 3.2 percent, rebounding after closing lower in eight of the previous nine sessions. The largest Arab bourse is up 17 percent year-to-date.

“It’s not entirely clear whether we’re done with the correction yet or not, but we are now reasonably positioned for slower and steady gains,” said Paul Gamble, head of research at Jadwa Investment.

Etihad Etisalat (Mobily) gained 1.1 percent. The telecoms firm reported a 21 percent rise in earnings on Monday, just short of forecasts.

In Egypt, the main index fell 1.2 percent after the body overseeing the country’s presidential election disqualified ten out of 23 candidates from the race, adding to doubts over a transition to democracy.

A ruling on appeals by the disqualified candidates, which include front-runners such as former spy chief Omar Suleiman, the Muslim Brotherhood’s Khairat al-Shater and ultra-orthodox Salafi sheikh Hazem Salah Abu Ismail, was expected on Tuesday.

“People are awaiting the final verdict on who is eligible to run for the presidency,” said Osama Mourad of Arab Finance Brokerage. “The ambiguity continues and we’re seeing extremely low turnover.”

In Abu Dhabi, telecoms operator Etisalat helped the index rise 0.2 percent from Monday’s eight-week low.

Etisalat climbed 1.3 percent, trimming its year-to-date losses to 4 percent.

Aldar Properties dipped 0.9 percent after signing a $1.09 billion loan with National Bank of Abu Dhabi (NBAD) , saying the deal would allow the company to manage its working capital and liquidity requirements for three years.

“Aldar has been a bit tight on liquidity and had significant leverage – this is basically to fund business as usual,” said Ibrahim Masood, senior investment officer at Mashreq bank.

Dubai’s benchmark closed largely flat at 1,649 points, with year-to-date gains at 21.9 percent.

“Dubai continues to stay within its tight range of the past month with a high of 1,707 and a low support of 1,637,” said Bruce Powers, head of research and analysis at Trust Securities.

“Fluctuations within the range have little consequence.”

If the index breaks below this range, its next support will be at 1,592, while a break above would push it towards 1,730, he added.

Qatar’s measure slipped 0.1 percent to its lowest close since March 25, while Kuwait’s index climbed 0.7 percent and Oman’s benchmark rose 0.6 percent.