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Jordanian dealers monitor price movements at the investors’ gallery of the Amman Stock Exchange, yesterday.
DUBAI: Saudi Arabia’s banks dragged down the bourse yesterday after fourth-quarter earnings from the sector missed most analysts’ forecast and other regional markets also fell.
The kingdom’s index lost 1 percent, down for a third session since Saturday’s four-month high.
Bank Al Jazira, which reported an 11 percent decline in fourth-quarter net profit on Monday, fell 3.6 percent, while Riyad Bank, which missed the average analyst forecast with a 4.1 percent quarterly profit gain, dipped 0.7 percent.
“Bank Al Jazira’s decline in non-interest income, due to lower Tadawul trading, resulted in slower top-line growth. This, coupled with increased provisions, led to the decline in profits,” Mahmood Akbar, banking analyst at NCB Capital, said in a note.
“Although the bank is rapidly growing its loan and net income, we remained concerned on its low return on equity, weak asset quality and high dependence on brokerage.”
The negativity extended to Al Rajhi Bank, the kingdom’s largest listed bank, which has yet to report its numbers. It dropped 2.9 percent.
The exception was Saudi British Bank (SABB), which beat analysts’ average forecast with a 24.4 percent rise in Q4 net profit. The bank’s shares gained 1 percent.
Away from the banking sector, Sipchem shed 2.3 percent after posting a 25.3 percent drop in fourth-quarter net profit earlier on Tuesday.
The petrochemical sector slipped 0.3 percent.
Elsewhere, Qatar ended lower for a third day in heavy selling as weak quarterly earnings disappointed investors.
Doha-listed National Leasing (Alijarah Holding Company) dropped 10 percent after the company reported a 11.8 percent fall in full-year net profit.
“People were expecting them to outperform 2011 but it missed estimates in the third-quarter and it’s hard to make up those numbers,” said Yassir Mckee, wealth manager at Al Rayan Financial Brokerage. “Some short-term investors are disappointed, but it’s a good stock for the long term.”
The firm’s board recommended a cash dividend of 20 percent or 2 riyals per share.
Qatar’s benchmark fell 1 percent, trimming January’s gains to 2.4 percent. Investors are cashing out after an early-year surge driven by dividend expectations. The market hit a nine-month peak on Thursday.
There will likely be renewed selling pressure after dividends are paid in February, Mckee added.
Losers outnumbered gainers 16 to four. Qatar National Bank and Qatar Electricity and Water both shed 0.7 percent, while Industries Qatar fell 1.5 percent.
In the UAE, Abu Dhabi’s measure rose to a fresh 19-month closing high, up 0.3 percent to 2,774 points. It failed to break strong resistance around 2,777 points, the previous peak of April 2011.
Heavyweights Etisalat and First Gulf Bank rose 0.6 and 0.4 percent respectively.
Developers also advanced, with Aldar Properties up 1.2 percent and Sorouh Real Estate adding 1.3 percent.
Global market gains and signs of a gradual recovery in the UAE’s real estate sector have boosted investor confidence in local equities.
“This year, we started the rally earlier and foreign investors are participating, while they weren’t last year,” said an Abu Dhabi-based trader who asked not to be identified.
“We’re still a bit early for profit taking - but institutional investors are taking a breather. Retail investors are rotating positions.”
Elsewhere, Cairo’s benchmark dropped 1.4 percent to finish at 5,657 points, down for a third session in the last four since the market found resistance last week. The index peaked at 5,884 points on Wednesday, which is near 5,896 points, the previous peak hit in October. Reuters