The largest listed stock on the bourse, Saudi Basic Industries Corporation
Jeddah - Arab Today
Banking shares helped lift Saudi Arabia’s stock market on Tuesday as two lenders beat analysts’ earnings forecasts, helping boost investor sentiment across the region, while Egypt extended its correction.
Banque Saudi Fransi jumped 6.7 percent to SR27.00 after it reported a 2.7 percent increase in first-quarter net profit to SR1.08 billion ($288 million) after market close on Monday.
Four analysts surveyed by Reuters had on average forecast the bank would make a quarterly profit of 964.3 million riyals.
In a note by Riyad Capital, analysts maintained a “buy” rating on the stock with a price target of 34.00 riyals adding that the stock will continue to perform well in the near term.
Alinma Bank, a stock favored by local day traders, reported a 13.7 percent rise in profit to SR391 million ($104.3 million). Shares rose 1.9 percent.
The two banks, the first to report earnings in their sector, helped boost the banking sub-index, which added 2.2 percent.
“These results have positively surprised investors, who were not expecting banks to fare well given the tightening credit conditions, increased drawdowns from government deposits, and in lieu of falling hydrocarbon dollars,” said a bank sector analyst.
The largest listed stock on the bourse, Saudi Basic Industries Corp., dropped 1.9 percent as it went ex-dividend, creating a drag on the petrochemical sector.
The cement sector rallied after the deputy head of the Saudi national committee of cement companies told Al-Riyadh newspaper that Saudi Arabia had lifted a ban on exporting cement.
Southern Province Cement Company and Saudi Cement, the two largest cement firms by market value, each climbed more than 5.5 percent.
Tadawul stock index closed up 1.5 percent to 6,404 points.
Elsewhere in the Gulf, sentiment was also upbeat with Dubai’s index up 1.5 percent to 3,474 points, a five-month high.
Much of the volume was concentrated on small and mid-cap stocks. Amusement park developer Dubai Parks and Resorts rose 3.1 percent.
In Abu Dhabi, bank shares, which have been relatively dormant over the past several weeks, fared well, helping lift the bourse 0.4 percent higher.
A positive spillover from the two Saudi banks’ profit news encouraged investors to buy other banking shares. Abu Dhabi Commercial Bank and First Gulf Bank rose 1.4 and 1.3 percent respectively.
In Qatar, the exchange added 0.4 percent with oil rig provider Gulf International Services jumping 3.4 percent.
Ezdan Holding Group, a real estate development with a market value over $12 billion, added 1.6 percent. On Tuesday the company said it had received shareholder approval to raise $2 billion through the issuance of sukuk.
In Egypt, the main index slipped 0.2 percent, extending the correction which started at the end of last week as investors booked profits after the devaluation of the currency on March 14 sparked a market rally.
But the sell-off was less severe than in the previous two sessions. Bourse data showed foreign traders bought on price dips with investment firm Qalaa Holdings and Global Telcom Holding each adding more than 1 percent.
Source: Arab News