Tadawul index drops 0.1%, bank shares gain strength

JEDDAH: Gulf stock markets ran out of steam on Monday after several strong sessions as oil prices fell by more than $1 a barrel, although positive fourth-quarter corporate earnings supported individual stocks.
Brent crude traded below $49 after analysts at Goldman Sachs cut their average forecast for the benchmark in 2015 to $50.40 a barrel from $83.75.
Saudi Arabia’s stock index slipped 0.1 percent as shares in petrochemicals giant Saudi Basic Industries fell 1.9 percent; petrochemical industry earnings are under major pressure from weak oil prices.
However Saudi banks, boosted by generally positive financial results, offset most of petrochemicals’ losses on Monday.
Saudi Hollandi Bank jumped 2.0 percent after it beat analysts’ expectations with a 33 percent rise in fourth-quarter net profit. The lender made SR461.9 million ($123.1 million) in the three months to Dec. 31; analysts surveyed by Reuters had forecast it would post, on average, a net profit of SR433 million.
Banque Saudi Fransi added 1.0 percent after posting a 211 percent rise in fourth-quarter net profit, also ahead of analyst forecasts.
Dubai’s index edged down 0.7 percent after rising as much as 1.9 percent early in the session. Most stocks declined and real estate developer DAMAC, which had earlier in the day surged 21 percent from the last finish of its London-listed shares as it listed in Dubai, closed just 1.8 percent higher.
“You cannot have a clear trend in the current environment,” said Sebastien Henin, head of asset management at The National Investor in Abu Dhabi.
“The key point is oil prices. As long as investors don’t think that we have reached the bottom on oil, the market will be trendless.”
Abu Dhabi’s bourse also edged down 0.7 percent, while Qatar fell 0.9 percent. Petrochemicals-to-steel conglomerate Industries Qatar tumbled 6.5 percent to 148.10 riyals after plunging its daily 10 percent limit in the previous session on a disappointing 2014 dividend proposal.
The stock has turned technically very bearish after triggering this week a double top formed by this year’s highs and pointing in the medium term down to about 130 riyals.
Oman’s benchmark rose 0.6 percent. Investment firm Al-Anwar Holding, up 4.0 percent, was the top gainer after saying late on Sunday that its profit in the three months to Dec. 31 had more than doubled to 3.7 million rials ($9.7 million).
Egypt’s bourse jumped 2.2 percent in a broad rally. GB Auto, the country’s biggest listed vehicle assembler and distributor, surged its daily 10 percent limit.
The firm’s chief executive told Reuters last week that it was working on a rights issue and planned to invest $1.5 billion to build two new factories.
On Monday, the firm said the rights issue would be worth 960 million Egyptian pounds ($134 million).