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Saudi downbeat after Sabic Q4 miss
Below-forecast earnings from Saudi Basic Industries Corp (SABIC) and Al Rajhi Bank will dampen sentiment on an already downbeat Saudi Arabia bourse on Wednesday.
January 18, 2012 2:04 by Reuters
SABIC reported quarterly profit of 5.24 billion riyals ($1.40 billion), down 10 percent from a year earlier due to lower petrochemical product prices.
Analysts surveyed by Reuters expected the firm to post, on average, a net profit of 7.4 billion riyals for the fourth quarter.
Shares of the world’s largest chemicals producers fell 2.1 percent on Tuesday to a seven-week low ahead of its results.
Al Rajhi, Saudi’s largest listed lender by market value, reported a quarterly net profit of 1.9 billion riyals ($506.3 million), up 13.9 percent from last year, but slightly below the consensus forecast of 1.914 billion riyals.
“Petchems, as expected, have been weak and banks have also been weaker,” says Farouk Miah, acting head of research at NCB Capital. “Provisioning has been higher and operating business has not been as strong as expected.
“A lot of stocks remain at good value. Banks’ provisioning was hopefully a year-end thing and will not continue, so we’re positive on them,” Miah adds.
Riyad Bank is likely to face selling pressure after its earnings also missed estimates.
Saudi Savola Group will be in focus after posting a fourth-quarter net profit of 498.6 million riyals ($132.95 million), beating analyst forecasts.
The UAE finance ministry said it will boost wages and benefits for 91,000 federal government employees welfare recipients and retirees from January onwards.
Dubai’s Union Properties has reached a deal with Emirates NBD to repay 1.1 billion dirhams debt through asset transfer, according to a newspaper report.
General sentiment in the Gulf could be helped by steady Asian shares on Wednesday, after Chinese economic data from a day earlier boosted sentiment.
Brent crude rose above $112. (Reporting by Nadia Saleem; Editing by Matt Smith)