Insurance sector lifts Saudi bourse

DUBAI: The Tadawul All Share Index (TASI) on Monday rose 0.1 percent as most insurance stocks were lifted by the exceptional financial performance of two companies.
Shares of Etihad Etisalat (Mobily) tumbled 6 percent to SR21.05 ($5.61) after it swung to a net loss of SR163 million ($43.47 million) in the first quarter, compared with a SR20 million net profit a year earlier. Average analyst expectations were a net loss of SR69.39 million.
Mobily attributed its third consecutive quarterly loss to a drop in revenue and higher interest and financial charges.
“The ongoing losses combined with the strong decline in sales are the key concerns,” said NCB Capital, which has a “neutral” recommendation on the stock with a price target of SR25.
Shares in Company for Cooperative Insurance, one of the largest insurers by market value, jumped 4.1 percent after posting a net profit that more than doubled to SR160.3 million in the three months to March 31. Malath Cooperative Insurance, meanwhile, climbed 3.3 percent after its first-quarter net income more than tripled.
Consumer cyclical shares were mixed, with home-improvement retailer Saudi Hardware Company (SACO) down 1.9 percent while bookstore and electronics seller Jarir rose by 0.6 percent, extending gains over the past two sessions to 9.1 percent.
Shares in apparel retailer Fawaz Alhokair, which were suspended on Sunday, surged 10 percent after reporting a net profit of SR79.4 million for its fourth quarter, beating the SR3.17 million a year earlier and analysts’ expectation of a SR61.7 million net profit.
Analysts at Al-Rajhi Capital said an improving gross margin, which had been squeezed over the past few quarters, was encouraging and the company may be able to maintain a margin of about 20 percent in the coming quarters.
The Qatar index fell 0.4 percent, dragged lower by oil-related shares and a 2 percent drop for commodities shipper Qatar Gas Transport.
Dubai’s index was the region’s worst performer, down 1.1 percent.
The main drag was profit-taking on shares of Union Properties, which had surged in unusually heavy trade in the previous session. The developer fell 3.2 percent on Monday.
In Abu Dhabi, the index added 0.2 percent with support from First Abu Dhabi Bank and gas explorer Abu Dhabi National Energy, up 1.4 percent and 3.3 percent respectively.
Investors have been building positions in TAQA on indications that the financially troubled company had turned a corner, with a state-run utility increasing its stake, and as the company plans to sell some of its international assets.
Egypt’s index recovered a little of the previous session’s 2.8 percent loss, as foreign traders helped it to a 0.3 percent gain, exchange data showed.
Global Telecom Holding, one of the stocks favored by international funds, was the top performer with a 3.4 percent gain.