Stock markets in Saudi Arabia and Dubai pulled back Wednesday as oil prices fell after strong gains earlier in the week, while technicals and dividend bets supported other Gulf bourses.
Brent crude dropped more than 2 percent Wednesday after a new build in U.S. crude stockpile levels put a global glut back in focus, cutting short a rally that had pushed up prices by about 19 percent over the past four sessions.
Saudi Arabia’s equities index edged down 0.6 percent to 9,169 points as most stocks pulled back, including some petrochemicals such as Yanbu National Petrochemical Co. and National Industrialization Co. (Tasnee), down 2.9 and 1.5 percent respectively.
Investment firm Kingdom Holding edged down 0.4 percent after it said it had sold most of its stake in media giant News Corp.
The Saudi stock index approached but then pulled back from technical resistance on its 100-day average, now at 9,379 points, as trading volume remained active but fell by about a third from the previous day.
Dubai’s index, which had also rallied along with oil this week, fell 1.1 percent as Dubai Islamic Bank slid 1.7 percent and Dubai Investments dropped 2.7 percent.
Shares in investment bank Shuaa Capital tumbled 4.9 percent after Moody’s Tuesday withdrew its ratings, citing its “own business reasons” without elaborating.
Shuaa said Wednesday it had decided not to renew the ratings contract with the agency because it had no public debt.
But property developer DAMAC once again surged its daily 15 percent limit. The stock, which had previously traded only in London and cross-listed in Dubai on Jan. 12, had plunged 36 percent last month on the emirate’s bourse.
It started recovering this week after the firm’s subsidiary DAMAC Real Estate Development Ltd. reported a 46-percent surge in 2014 profit; the stock has now recouped most of its losses.
Abu Dhabi’s benchmark, which had lagged Dubai’s rebound, climbed 1.3 percent to 4,649 points after breaking above technical resistance at 4,606 points, its late December high.
The break triggered a bullish right triangle formed by the highs and lows since that high, and pointing up to around 4,900 points.
Qatar’s index rose 1.1 percent, largely because of Ezdan Holding, a company with interests in property and other sectors, which surged its daily 10 percent limit ahead of an expected fourth-quarter earnings release.
Aamal Co., another local firm, Tuesday announced a 10-percent cash dividend and a 5-percent bonus share issue. Shares in the company, which had not paid cash dividends since 2008, also surged 10 percent.
Vodafone Qatar surged 7.3 percent while its trading volume jumped to a seven-month high. The firm said this week it had become fully Shariah-compliant, opening the stock up to Islamic funds.
Meanwhile Industries Qatar, the second-largest petrochemicals firm in the Gulf, fell 1 percent.
Egypt’s market extended gains, rising 0.9 percent as the Al-Youm Al-Sabea news website reported that Saudi Arabia, Kuwait and the United Arab Emirates would provide Cairo with $10 billion in deposits before an investment conference in March.
Commercial International Bank was the main support, gaining half a percent.
The bank is expected to publish its fourth-quarter earnings next week and Naeem Brokerage Wednesday forecast its profit would rise 26 percent.
“Fundamentally, CIB continues to remain a strong pick, maintaining its position as the top private sector bank in Egypt and a key beneficiary from the expected growth in banking activities [both retail and institutional] in Egypt,” the brokerage said in a note.
Shares in Juhayna Food Industries jumped 3.6 percent after Goldman Sachs Tuesday raised the stock to “buy” from “neutral” and added it to its Central and Eastern Europe, Middle East and Africa focus list.
