21/07/2010
STOCKS NEWS MIDEAST-Saudi's PetroRabigh slumps to 6-wk low on Q2
Rabigh Refining and Petrochemical Co (PetroRabigh) tumbles to a six-week low after its quarterly profit halves compared to the first quarter, while Saudi Telecom Co also declines as its profit dips.
PetroRabigh falls 7.8 percent, hitting its lowest level since June 9. The joint venture of state-owned oil company Saudi Aramco and Japan's Sumitomo Chemicals made 121.8 million Saudi riyals ($32.48 million) in the second quarter.
Chief executive Ziad Labban said the quarter-to-quarter net profit drop was due to non-recurring gains the firm made during the first quarter of 2010.
Saudi Telecom falls 1.6 percent after the former monopoly's quarterly profit dropped 31 percent.
Kingdom Holding rises 1.9 percent. The firm reported a 47 percent rise in second-quarter profit late Tuesday.
Saudi Arabia's index <.TASI> edges up 0.1 percent.
Emaar Properties <EMAR.DU> edges higher to lift Dubai's index but trading remains slack with few catalysts to interest investors.
Emaar climbs 0.3 percent, accounting for nearly a third of all shares changing hands on the index. The developer is forecast to report a second-quarter profit of 968 million dirhams as the handover of units in Burj Khalifa, the worlds's tallest tower, boosts revenues.
Emaar's shares are down 79 percent from a January 2008 high and the outlook for Dubai's property sector remains grim. A Reuters poll in July forecast house prices in the emirate will fall another 10 percent, having already plunged 55 percent from their peaks of two years.
"I can't see demand picking up and we'll definitely see more supply coming on line, but like trying to predict earnings, it's a black box, which is why vulture funds have not stepped in to buy up Dubai property to provide the market with a floor," says Chet Riley, Nomura property analyst.
"These funds can't get the granularity yet to feel comfortable enough to invest."
The index climbs 0.5 percent to 1,517 points, trimming its year-to-date losses to 15.9 percent.
Masraf Al Rayan rises after its second-quarter profit surges, limiting losses on a subdued Qatar index.
The Islamic lender climbs 0.7 percent. Its quarterly profit rose 66 percent, percent driven by growing customer base and a push to diversify its services.
Vodafone Qatar <VFQS.QA> is flat after reporting a narrowing quarterly loss and saying it expects to make a profit for the three months ending September 30.
Commercial Bank of Qatar which is forecast to report an 18 percent rise in second-quarter profit, falls 1.3 percent.
The index slips 0.1 percent to 6,929 points.
Dana Gas rises to equal Tuesday's seven-week high, helping Abu Dhabi's index <.ADI> hold steady in early trade.
Dana climbs 1.4 p
ercent to 0.75 dirhams. As one of the index's cheaper stocks in absolute terms, it is usually the most active as day traders try to turn a quick profit on slight moves up or down, while analysts say it is also an attractive means to diversify away from the dominant property and banking sectors.
Dana is forecast to report a 90 percent fall in second-quarter profit, although profit for the second-quarter of 2009 was boosted by a one-off gain from a stake sale of its Iraqi unit. Aldar Properties falls 0.4 percent to be just above Tuesday's 16-month low.
"At present, Aldar has a limited cash flow and constantly needs to borrow to fund fairly ambitious developments," says Chet Riley, Nomura property analyst.
Aldar's finances will become murkier after the first-quarter of 2011 as multi-billion dirham debts mature.
In March, Aldar said it had sold its assets on Yas Island, home to Abu Dhabi's Formula One racetrack, to the government for 9.1 billion UAE dirhams ($2.48 billion).
"There's hangover on Aldar from its receivables for its Yas Island infrastructure sale," adds Riley.
"I think the company will get a limited cash infusion, but I doubt it will get the full amount from the government, some may be debt relief. The market had originally anticipated full repayment in cash, but this may not be the case."
Aldar is forecast to make a second-quarter loss of 130 million dirhams ($35.39 million). Abu Dhabi's index edges up 0.03 percent to 2,544 points.
Middle East markets look set to trade little changed on Wednesday as mixed earnings and uncertain global equities do little to attract investors.
Saudi Telecom's second-quarter profit fell 31 percent to $549 million, in line with forecasts, as domestic competition bites and its foreign forays eat up cash.
Developer Dar Al Arkan's quarterly profit dipped nearly 30 percent on declining sales of building-ready land, its main revenue source.
Last week, Morgan Stanley began coverage of Dar Al Arkan, giving it an overweight rating and a price target of 15.4 riyals. It ended yesterday at 11.35 riyals. Prince Alwaleed bin Talal's Kingdom Holding <4280.SE> might provide some cheer after its second-quarter profit rose 47 percent, due mainly to an improved performance by its hotels business.
These numbers should offer a little upward momentum to Saudi Arabia's index <.TASI>.
"Technically, the market looks bearish and it will probably break below 6,000 points," says a Riyadh-based analyst who asked not to identified. "Summer is here and markets will remain volatile -- one day the glass is half full, the next it's half empty.
"Sentiment is very delicate and a little bad news changes everything. This pattern will continue for the next month and a half because I don't see any major catalysts in that time."
Over in Qatar, things look a little rosier. Masraf Al Rayan's second-quarter profit jumped 66 percent, driven by growing customer base and a push to diversify its services.
Asian stocks edged higher on Wednesday as investors cheered Apple's strong earnings and on optimism that China may roll back policy tightening measures later this year, while the euro firmed ahead of euro zone's bank stress test results late in the week.
U.S. stocks rose overnight, reversing earlier steep losses as bargain hunters emerged amid speculation the Federal Reserve will take steps to spur lending. The Dow Jones industrial average rose 0.7 percent(Reuters)
