Profit-taking weighs on Saudi shares, Egypt at 9-week low

A stock index board is seen as investors look at share prices on the trading floor at the Dubai Financial Market in this January 31, 2011 file photo. (REUTERS/Jumana El-Heloueh/Files)

DUBAI/CAIRO: The Saudi bourse declined for a fifth session Tuesday as investors booked gains from a recent rally, and Egyptian shares fell to a nine-week low on uncertainty over the drafting of a new constitution and a presidential election.

The kingdom’s index lost 1.9 percent, trimming year-to-date gains to 17.7 percent.

Heavyweights Saudi Basic Industries Corp. and Al-Rajhi Bank fell 2.6 and 2.2 percent respectively.

“Today’s move is normal and healthy and in the short term [the index] could go down to 7,460 points,” said a Saudi-based portfolio manager who asked not to be identified.

“The majority of people are not looking at earnings unfortunately, but they will give a good support to the market because expectations are good especially on banks and even petrochemicals,” he added.

A call by King Abdullah for a crackdown against market manipulation has spooked investors, some analysts say.

In Egypt, the main index saw its sixth day of decline, falling 0.8 percent to its lowest close since Feb. 6.

An Egyptian court halted Tuesday a move to create a new constitutional assembly pending a ruling on its legality, a decision that could delay a constitution needed urgently in order to clarify the powers of Egypt’s new head of state.

Ezz Steel dropped 1.9 percent after it said its 2011 net profit dropped 20 percent as soaring costs and higher taxes offset a rise in sales.

In Dubai, the index rallied 1.3 percent as bargain-hunters bought stocks after three sessions of declines.

Telecoms operator du jumped 6.8 percent. Analysts on average forecast the firm would report a 36-percent increase in first-quarter profit.

“[There’s] surprisingly upbeat sentiment today from local investors – overall there is positive sentiment toward Q1 numbers,” said Julian Bruce, EFG-Hermes director of institutional equity sales.

In Doha, Vodafone Qatar surged 10 percent to a near two-year high, with retail investors betting the operator would report improved earnings.

DUBAI/CAIRO: The Saudi bourse declined for a fifth session Tuesday as investors booked gains from a recent rally, and Egyptian shares fell to a nine-week low on uncertainty over the drafting of a new constitution and a presidential election.

The kingdom’s index lost 1.9 percent, trimming year-to-date gains to 17.7 percent.

Heavyweights Saudi Basic Industries Corp. and Al-Rajhi Bank fell 2.6 and 2.2 percent respectively.

“Today’s move is normal and healthy and in the short term [the index] could go down to 7,460 points,” said a Saudi-based portfolio manager who asked not to be identified.

“The majority of people are not looking at earnings unfortunately, but they will give a good support to the market because expectations are good especially on banks and even petrochemicals,” he added.

A call by King Abdullah for a crackdown against market manipulation has spooked investors, some analysts say.

In Egypt, the main index saw its sixth day of decline, falling 0.8 percent to its lowest close since Feb. 6.

An Egyptian court halted Tuesday a move to create a new constitutional assembly pending a ruling on its legality, a decision that could delay a constitution needed urgently in order to clarify the powers of Egypt’s new head of state.

Ezz Steel dropped 1.9 percent after it said its 2011 net profit dropped 20 percent as soaring costs and higher taxes offset a rise in sales.

In Dubai, the index rallied 1.3 percent as bargain-hunters bought stocks after three sessions of declines.

Telecoms operator du jumped 6.8 percent. Analysts on average forecast the firm would report a 36-percent increase in first-quarter profit.

“[There’s] surprisingly upbeat sentiment today from local investors – overall there is positive sentiment toward Q1 numbers,” said Julian Bruce, EFG-Hermes director of institutional equity sales.

In Doha, Vodafone Qatar surged 10 percent to a near two-year high, with retail investors betting the operator would report improved earnings.

The index rose 0.2 percent, its first gain in six sessions.

In Kuwait, Boubyan Bank climbed 3.6 percent after National Bank of Kuwait received regulatory approval to raise its stake in the Islamic lender. NBK closed flat.

“This is a long-term positive for NBK, but short term there will be no effect on earnings,” said Shahid Hameed, Global Investment House’s regional head of asset management.

“Some large-cap names are reaching levels which should be a medium-term bottom – we’re at a point where Kuwait will start looking positive purely on valuations,” Hameed added.

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