October 20, 2015 / 1:19 PM / 2 years ago

MIDEAST STOCKS-Oil dampens Saudi, Emaar Misr boosts Egypt

* Saudi's Sipchem, Mouwasat, Savola fall after Q3 earnings
    * But real estate shares not hurt much by tax news
    * Mobily continues recovery from August low
    * Gulf markets generally sluggish
    * Egyptian property seen as hedge against currency weakness

    By Andrew Torchia
    DUBAI, Oct 20 (Reuters) - Saudi Arabia's stock market fell
on Tuesday in response to weak oil prices while real estate
developer Emaar Misr, seen as a hedge against currency
depreciation, boosted Egypt's index. Gulf markets in general
remained sluggish.
    Brent crude sank nearly 4 percent overnight and
remained under pressure in Asian trade on Tuesday. This helped
to push the Saudi stock index down 1.0 percent at the
close.
    Some shares tumbled in response to poor third-quarter
earnings, with Saudi International Petrochemical Co (Sipchem)
 down 8.4 percent after it reported a 55.4 percent
slump in net profit to 71.6 million riyals ($19.1 million).
Analysts had forecast 122.9 million riyals. 
    Mouwasat Medical Services, one of Saudi Arabia's
largest listed healthcare providers, dropped 2.0 percent after
reporting a 40.3 percent fall in profit to 43 million riyals;
analysts had forecast 64 million riyals. 
    Savola Group, Saudi Arabia's largest food products
company, slipped 1.3 percent after reporting a 47 percent fall
in profit to 371.6 million riyals; analysts had forecast on
average 411 million riyals. The company also cut its
third-quarter dividend. 
    However, real estate shares reacted calmly to news that the
cabinet had submitted a proposal to the advisory Shura Council
to impose a fee of up to 100 riyals per square metre on
undeveloped land. The council is expected to complete its study
of the proposal within 30 days, though it is not clear when the
tax would actually be imposed. 
    The stock market's property sector index dropped
about 10 percent in late March after the cabinet decided in
principle to impose such a tax, because of a belief that the
value of real estate developers' land banks would shrink.
    But real estate blue chip Dar Al Arkan fell only
0.7 percent on Tuesday, suggesting investors have now
largely factored in the expected tax.
    Telecommunications firm Mobily added 3.6 percent
to 31.90 riyals, bringing its rebound from its August low to 47
percent. The stock has almost regained the 33.80 riyal level
where it closed in June just before it was suspended for two
months because of the market regulator's investigation of its
earnings restatements.
    Dubai's stock index fell 0.6 percent while Abu
Dhabi and Qatar were almost flat. 
    However, Qatar Gas Transport (Nakilat) rose 4.1
percent and was its market's most heavily traded stock after the
firm decided to raise its foreign ownership limit to 49 percent
from 25 percent. Foreigners currently hold about 8.8 percent of
the company, according to exchange data. 
    Egypt's stock index rose 0.5 percent as Emaar Misr
 climbed 5.2 percent.
    Late last week and early this week the central bank allowed
the Egyptian pound to edge down against the U.S. dollar in the
official market, apparently launching another period of managed
depreciation.
    On Tuesday the central bank held the pound steady in the
official market but the currency continued sliding in the
parallel market, showing investors expect a substantial drop in
coming months. 
    Property firms are seen as possible beneficiaries because
Egyptians may buy real estate to hedge against a weak currency
while foreign investors may be attracted to the sector by lower
prices in foreign currency terms.
    
    TUESDAY'S HIGHLIGHTS
        
    SAUDI ARABIA
    * The index dropped 1.0 percent to 7,690 points.
        
    DUBAI
    * The index fell 0.6 percent to 3,683 points. 
    
    ABU DHABI
    * The index edged up 0.2 percent to 4,585 points.
    
    QATAR
    * The index fell 0.3 percent to 11,756 points.
    
    EGYPT
    * The index climbed 0.5 percent to 7,659 points.
    
    KUWAIT
    * The index rose 0.4 percent to 5,805 points.

    OMAN
    * The index edged down 0.1 percent to 5,920 points.
    
    BAHRAIN
    * The index edged up 0.1 percent to 1,249 points.

 (Reporting by Andrew Torchia; Editing by Mark Potter)

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