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MIDEAST STOCKS-Saudi pulls back as retailers slide; Egypt moves little
March 9, 2016 / 8:44 AM / 2 years ago

MIDEAST STOCKS-Saudi pulls back as retailers slide; Egypt moves little

DUBAI, March 9 (Reuters) - Saudi Arabia’s stock market fell early on Wednesday as retailers dropped following a negative sales forecast by one of them, while Egypt’s bourse moved little amid uncertainty over the currency and interest rates.

The Saudi index dropped 0.8 percent in the first 15 minutes of trade as Jarir Marketing sank 7.2 percent after warning late on Tuesday that its sales would plunge by as much as 30 percent year-on-year in the first quarter of 2016.

The projected drop is partly because sales were unusually high in the first quarter of 2015, hitting 1.9 billion riyals ($507 million) as King Salman granted a bonus of two months’ salary to state employees to mark his accession to the throne.

But it is also due to state austerity measures in response to low oil prices, which caused the government to run a budget deficit of nearly $100 billion last year; the measures have cut the disposable incomes of many Saudis.

Durable goods retailer United Electronics (eXtra) fell 1.4 percent, clothing retailer Abdulaziz Alhokair Co lost 2.6 percent and jeweller Ahmed Fitaihi Co slid 1.6 percent.

The petrochemical sector also saw profit-taking, falling nearly 1 percent, while some low-priced insurance stocks, favourites of local speculators, rose in unusually heavy trade, with Wafa Insurance up 6.1 percent.

Egypt’s index edged down 0.2 percent amid confusion over monetary policy.

The central bank on Tuesday removed limits on how much individuals can withdraw or deposit in foreign currencies at banks, a move intended to increase liquidity in a market that has been starved of dollars. But it is still not clear how authorities intend to resolve Egypt’s long-term foreign exchange shortage and the overvaluation of the Egyptian pound.

Beltone Financial, which had more than quadrupled in recent weeks on its acquisition of CI Capital, plunged again on profit-taking, dropping 9.6 percent. (Reporting by Andrew Torchia; Editing by Catherine Evans)

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