Saudi Stock Exchange (Tadawul) makes first financial disclosure ever

Published June 25th, 2014 - 10:56 GMT
“Investors get scared, but more than that, people who provide them leverage get scared,” Mohindra said.
“Investors get scared, but more than that, people who provide them leverage get scared,” Mohindra said.

Saudi Stock Exchange (Tadawul), the Middle East's largest bourse that is planning to go public, reported a 37 percent drop in 2013 net profit, its first ever financial disclosure showed on Tuesday.

The exchange made a net profit of SR152 million ($40.5 million) last year. It attributed the decline in earnings to lower revenues from reduced average daily trading volumes.

These fell to SR5.5 billion in 2013, from SR7.7 billion in the year earlier period.

Overall, the bourse's revenue dipped 21.4 percent to SR346 million in 2013. The exchange said it is committed to the strategy of developing and diversifying its services for an overall boost for trading on the bourse.

Tadawul's chief executive said in May the company would be applying to undertake an initial public offering soon and will look to hire a financial adviser to manage the share sale, without specifying a timetable for the listing.

Tadawul All Share Stock Index (TASI) ended 33 percent lower at 9,522.1 points on Tuesday closing.  

Only  Insurance, Multi0investment, Real Estate Development and Media & Publishing indices registered increase in value out of 16 sectoral indices. Elsewhere, Dubai stocks plunge as builder questions swirl. Dubai’s main index closed Tuesday at 4009.01 points, 25 percent below its May peak.

Sachin Mohindra, a portfolio manager at Abu Dhabi-based Invest AD, said other factors also contributed to the Dubai sell-off.

He noted that the market rose more than 200 percent from the start of last year through this May, and that investors were now taking some profits. The recent unrest in Iraq also hurts investor sentiment, though he expected the direct effect on UAE markets would be “fairly minimal.”

Rapid declines in recent days are also forcing local retail investors, who tend to borrow heavily in their stock bets in the hope of maximizing gains, to sell some of their holdings to cover their positions.

“Investors get scared, but more than that, people who provide them leverage get scared,” Mohindra said.

Egypt’s benchmark EGX30 fell 1.66 percent to 8,167 points and the broader EGX70 dropped 1.56 percent

Turnover of listed stocks was relatively low, recording LE569 million. Egyptians were the net-sellers of the session, for LE34.3 million, while non-Arab foreigners were the principal net-buyers, to the tune of LE24.8 million.

Almost all of EGX30's shares were in the red, with market bellwether Commercial International Bank (CIB) shedding 1.71 percent of its share price to trade at LE35.65.

Oil rises above $114

Brent crude resumed its upward trend, climbing above $114 a barrel on Tuesday, as it received support from fighting in Iraq, supply disruption in Libya and expectations of a decline in US crude inventories.

Brent crude was up 57 cents at $114.69 at 11:58 a.m. (1558 GMT), having fallen from a nine-month high of $115.71 last Thursday. The benchmark had its biggest one-day drop since May 16 on Monday. US crude rose 16 cents to $106.33

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