October 20, 2015 / 5:38 AM / 2 years ago

MIDEAST STOCKS-Oil weakness may dampen Gulf, land tax plan hit Saudi

DUBAI, Oct 20 (Reuters) - Middle East stock markets may be soft on Tuesday because of weak oil prices and global equity markets, while progress towards imposing a land tax in Saudi Arabia may hit real estate stocks there.

Brent crude sank nearly 4 percent overnight before rebounding marginally in Asian trade on Tuesday morning, while MSCI's broadest index of Asia-Pacific shares outside Japan is down 0.5 percent.

Saudi Arabia's housing minister said late on Monday that the cabinet had submitted a proposal to the advisory Shura Council to impose a fee of up to 100 riyals ($26.67) 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.

The impact may be less this time because the tax is expected, but investors may still react.

Among individual stocks, Savola Group, Saudi Arabia's largest food products company, may see selling after it reported a 47 percent fall in third-quarter net profit to 371.6 million riyals; analysts had forecast on average 411 million riyals. The company also cut its third-quarter dividend.

Meanwhile Mouwasat Medical Services, one of Saudi Arabia's largest listed healthcare providers, reported a 40.3 percent drop in third-quarter net profit to 43 million riyals; analysts had forecast 64 million riyals.

And Saudi International Petrochemical Co (Sipchem) reported a 55.4 percent slump in third-quarter net profit to 71.6 million riyals. Analysts had forecast 122.9 million riyals.

In Bahrain, mobile telecommunications operator Zain Bahrain may attract interest after it reported a 91 percent jump in third-quarter net profit, citing "exponential growth in mobile data subscribers" plus greater operational efficiencies. (Reporting by Andrew Torchia)

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