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MIDEAST STOCKS-Gulf may be soft, bank profits weigh on Saudi
October 17, 2016 / 5:51 AM / 10 months ago

MIDEAST STOCKS-Gulf may be soft, bank profits weigh on Saudi

DUBAI, Oct 17 (Reuters) - Gulf stock markets may be soft on Monday after global bourses and oil prices pulled back, while another weak earnings report from a Saudi Arabian bank may dampen shares in that country.

MSCI's broadest index of Asia-Pacific shares outside Japan is down about 0.6 percent, while Brent crude futures are below $52 a barrel.

In Saudi Arabia, Alinma Bank reported a 16.8 percent fall in third-quarter net profit to 312 million riyals ($83.2 million); the average forecast of analysts had been 409.1 million riyals.

Many Saudi banks have reported lower third-quarter earnings as the slow economy worsens loan quality, and although Alinma is only the kingdom's ninth-largest bank by assets, it is often the market's most heavily traded stock, a favourite of short-term retail traders.

Other banks across the region may also underwhelm investors. Emirates NBD, Dubai's largest lender and the first bank to report earnings from the emirate, may weigh on Dubai's general stock index after posting on Monday flat third-quarter net profit, narrowly missing analysts' forecasts.

The bank made a net profit of 1.66 billion dirhams ($452 million)compared to 1.67 billion dirhams in the corresponding period of 2015, according to financial statements. Three analysts on average forecast the bank would make a net profit for the quarter of 1.88 billion dirhams.

In Oman, Bank Sohar may seem some selling after Bank Dhofar said it had ended merger negotiations with its smaller rival after the two sides were unable to reach agreement on certain issues related to the tie-up.

In Kuwait, political uncertainty has risen after the emir ordered the dissolution of parliament on Sunday, opening the way to fresh elections; he said "security challenges" in the region could best be addressed by consulting the popular will.

An election season could further slow austerity measures which the government is attempting to introduce. However, Kuwait's finances remain among the strongest in the region and politics traditionally have little direct impact on the market, so stocks may move little. (Reporting by Andrew Torchia, Editing by William Maclean)

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