SABIC helps Saudi index rebound; poll woes weigh on Egypt

Bellwether Saudi Basic Industries Corp (SABIC) made its largest daily gain in nearly 11 months on Tuesday after its earnings beat forecasts, helping lift the bourse from seven-week lows, while Egyptian shares fell on election uncertainty SABIC jumped 4.3 percent to 102.25 riyals in its largest daily gain since March 2011.
SABIC said first-quarter net profit fell 5 percent to 7.27 billion riyals ($1.94 billion) from a year earlier on higher input prices. Analysts polled by Reuters on average forecast the firm would post a profit of 6.7 billion riyals. "The market has already beaten down the stock on result nervousness," Riyad Capital wrote in a note.
"Trading at 9.5 times 2012 estimated earnings with a dividend yield of 5.6 percent, we believe the stock will reverse its underperformance and we continue to recommend a 'buy"' rating," Riyad Capital added, raising its target on SABIC to 121.50 riyals from 117 riyals. The index climbed 3.2 percent, rebounding after closing lower in eight of the previous nine sessions. The largest Arab bourse is up 17 percent year-to-date. Etihad Etisalat (Mobily) gained 1.1 percent. The telecoms firm reported a 21 percent rise in earnings on Monday, just short of forecasts.
In Egypt, the main index fell 1.2 percent after the body overseeing the country's presidential election disqualified ten out of 23 candidates from the race, adding to doubts over a transition to democracy. A ruling on appeals by the disqualified candidates, which include front-runners such as former spy chief Omar Suleiman, the Muslim Brotherhood's Khairat al-Shater and ultra-orthodox Salafi sheikh Hazem Salah Abu Ismail, was expected on Tuesday.
In Abu Dhabi, telecoms operator Etisalat helped the index rise 0.2 percent from Monday's eight-week low. Etisalat climbed 1.3 percent, trimming its year-to-date losses to 4 percent. Aldar Properties dipped 0.9 percent after signing a $1.09 billion loan with National Bank of Abu Dhabi (NBAD), saying the deal would allow the company to manage its working capital and liquidity requirements for three years. Dubai's benchmark closed largely flat at 1,649 points, with year-to-date gains at 21.9 percent. Qatar's measure slipped 0.1 percent to its lowest close since March 25, while Kuwait's index climbed 0.7 percent and Oman's benchmark rose 0.6 percent.