Saudi stocks came under selling pressure from skidding oil prices and a host of lackluster corporate earnings, while stocks trading ex-dividend led other Gulf markets lower to close the week.
Saudi Arabia's benchmark index edged lower 0.5 per cent with banking and petrochemical stocks leading the losses. National Commercial Bank, Al Rajhi Bank, Saudi Aramco and Sabic all drifted into the red, as oil weakened by more than 2 per cent with the demand outlook taking a hit from fresh coronavirus lockdowns.
Earnings darken mood
Dar Alarkan Real Estate Development ticked down 1.8 per cent after it reported full-year profits of SR18.8 million, down 93.8 per cent from SR304.6 million. The came against the backdrop of lower sales and as the company was hit with lower lease revenues and increased costs.
Allied Saudi Fransi Cooperative Insurance was lower by 1.8 per cent after turning a loss-maker, with SR17.6 million in losses, reversing from SR41.6 million in year-ago profits. Gross written premiums dropped over 33 per cent. Its general and administration expenses increased, while revenues were impacted mainly from the automotive segment.
Dubai Financial Market trimmed 0.8 per cent to 2,496 points for a fifth straight day of losses to close out the week lower by 4.2 per cent. This is its first weekly loss after three weeks of gains. The index traded every day this week on the back foot, in line with global stock markets and concerns over new lockdowns elsewhere possibly delaying the turnaround for the global economy.
The Kuwait logistics company Agility is expected to benefit from the container ship blocking the Suez Canal since Tuesday. An elite rescue team is set to tackle the problem in the coming days as around $9.4 billion worth of goods a day have been halted from the disruption in supply chains.
"The daily chart shows that the price has just pierced lower Bollinger Band support level, signaling that price may recover to 2,514.65 levels," said Kaia Parv, Head of Investment Research at the firm. "RSI and Stochastic are still neutral but flirting with oversold levels, respectively near 32 and 23.
"Should RSI drop below 30 and 20, the price is more likely to snap back to resistance levels near 2,500 points."
Selloff on ex-dividend
Banking stocks weighed most on trade, led by Dubai Islamic Bank, which dropped 4.2 per cent in what was its sharpest decline this year as the stock was trading ex-dividend.
The Abu Dhabi Securities Exchange slipped as much as 1.3 per cent at some point during the day, before clawing back most of its losses to end lower by 0.3 per cent at 5,727 points. The turnaround was led by Etisalat, which settled lower by 2.7 per cent, a significant improvement from 4.5 per cent plunge it underwent earlier in the day as the stock traded ex-dividend.
Dividend factor
Oman's 30-company index dropped about a per cent to close at 3,678 points with Muscat Finance shedding 2.4 per cent as it traded with no dividend eligibility, while Bank Muscat, Al Anwar Ceramic Tiles and Al Jazeira Services suffered heavy losses a day after going ex-dividend.
Qatar Exchange ended the day lower by 0.4 per cent at 10,168 points, mainly pushed down by financial stocks with Qatar National Bank, Qatar Insurance and Qatar Islamic Bank all trading in red. Mesaieed Petrochemical gave up 1.9 per cent of its value as it was trading after dividend entitlement cutoff date.
