DUBAI: Major stock markets in the Middle East fell on Sunday after oil prices pulled back and global bourses sold off at the end of last week.
The correlation between oil prices and Gulf equity markets has strengthened in recent months with many investors believing markets will continue to trade in almost lockstep with crude prices in the near term.
In Riyadh, the index dropped 1.3 percent to 5,896 points, erasing Thursday's 0.8 percent gain. The petrochemical sector was one of the main drags with Saudi Basic Industries and Saudi Arabia Fertilizers, the two largest petrochemical producers by market value, falling 1.1 and 0.7 percent respectively.
The index has failed to close over the psychologically important level of 6,000 points since Jan. 14 as short-term traders sell to take profits on every bounce. Long-term investors are cautious about making large commitments to the market because of volatile oil prices.
Saudi Cement erased early gains and closed down 3.3 percent. The company recommended a dividend distribution of 3.00 riyals per share for the second half of 2015, versus a proposed dividend of 2.5 riyals a year earlier. But it also halted production at a clinker kiln and scrapped a plan to upgrade mills because of weak cement demand.
Egypt's index closed down 1.2 percent at 6,126 points, erasing some of the previous session's 2.2 percent gain. Foreign and non-Egyptian Arab investors were net sellers, bourse data showed.
Orascom Telecom tumbled 5.0 percent. National Bank of Egypt's investment arm expressed interest in buying CI Capital, potentially hindering Orascom's plan to form a major financial operation by acquiring CI Capital from Commercial International Bank.
Palm Hills last traded flat at 2.34 Egyptian pounds, off its session high of 2.39 pounds. Egypt's second-largest listed property developer reported a 128 percent jump in fourth-quarter net profit to 203.5 million Egyptian pounds ($26 million). It also proposed its first cash dividend, 0.15 pound per share, and a bonus share issue of one for 20.
"Revenues stood at 957 million Egyptian pounds, beating our forecast of 664 million Egyptian pounds, on higher-than-expected deliveries of villas, apartments and chalets," a note by Cairo-based Naeem Brokerage said.
Palm Hills is expected to have a strong 2016 in both off-plan sales and deliveries, the note added.
UAE, QATAR
Dubai's benchmark edged down 0.7 percent to 3,037 points in its lowest volume of trade for three weeks. At the opening the index traded in positive territory, but investors then booked profits, erasing some of Thursday's 2.8 percent gain.
Dubai Financial Market retreated 2.5 percent. The Gulf's only listed stock exchange reported an 89 percent drop in fourth-quarter net profit on Thursday to 15.5 million dirhams ($4.2 million); HSBC had forecast 20 million dirhams.
But Emaar Properties rose 0.9 percent. Investors are waiting for the emirate's largest developer by market value to release its quarterly results in coming days. SICO Bahrain expects Emaar to make a net profit of 1.1 billion dirhams, a 26 percent jump from a year earlier.
Abu Dhabi's index fell 0.9 percent in modest volumes, taking its 2016 losses to 4.7 percent. Blue chips First Gulf Bank and Etisalat, which combined make up a little under half of the bourse's total market value, fell 1.7 and 0.9 percent respectively.
Small-cap stocks favoured by local retail traders tumbled, with Abu Dhabi National Insurance and Invest Bank plunging 10.0 and 5.6 percent.
In Qatar, the index slid 0.7 percent with Industries Qatar falling 2.8 percent after the state-run petrochemical and metals producer reported a net profit of 570 million riyals ($157 million) for the three months to Dec. 31. That was down from 1.62 billion riyals a year earlier; SICO Bahrain and QNB Financial Services had forecast 1.16 billion and 1.11 billion riyals.
Blue-chip banks also sold off, with Qatar National Bank and Masraf Al Rayan each retreating more than 1.0 percent.
Oman bucked the regional downtrend. Its index rose 1.1 percent on the back of banks, with Bank Muscat climbing 1.8 percent.
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