Tadawul index drops 0.9%: Mobily rises 1.8%

JEDDAH: Petrochemical stocks pulled Saudi Arabia’s main equity index down in the wake of gas feedstock price rises in the 2016 state budget, while Egypt’s market rose in a broad-based rally, breaking technical resistance.
Telecommunications firm Mobily rose 1.8 percent after saying it had agreed with the majority of its lenders to waive a breach of covenant under loan facilities totalling SR12.1 billion. The Saudi Tadawul All-Share Index, which had dropped 0.9 percent on Tuesday, fell a further 0.4 percent.
Saudi companies have begun estimating the impact on their cost bases of energy and feedstock price rises in the budget.
Petrochemical producers are hardest hit, with Saudi Basic Industries (SABIC) projecting an 8-percent rise in its 2016 costs.
Retail investors reacted negatively and SABIC shares fell 2.6 percent, with the petrochemical sector index dropping 2.9 percent.
Miner Maaden dropped 1.5 percent; it said it was still calculating the impact.
Finance Minister Ibrahim Al-Assaf said the Kingdom expects to introduce value-added tax in two years, aiming for a tax rate of about 5 percent, the Al-Hayat newspaper reported. Most other Gulf markets rose. Dubai’s index was up 0.5 percent as financial firm Shua Capital rose 4.4 percent; the stock has seen unusually heavy volumes in the past week.