Saudi stocks underperformed on Thursday under pressure from key lenders and petrochemical makers as oil traded on the backfoot amid rising US crude inventories and fears that a new wave of virus infections could dampen demand recovery.
Saudi Arabia's benchmark index headed lower by 1.2 per cent to close at 9,486 points. Oil prices sustained their downward trend for a fifth straight session, stoking worries for investors in the world's largest oil exporter.
Al Rajhi Bank, National Commercial Bank and Samba Financial Group along with Advanced Petrochemical and Sabic pulled the index lower, while oil giant Saudi Aramco shed 0.9 per cent ahead of its full-year results on coming Sunday.
Abu Dhabi Securities Exchange eased 0.2 per cent to close at 5,736 points. Etisalat advanced as much as 1.5 per cent earlier in the day after the shareholders approved dividends that included 40 fils per share special payout. The shareholders also approved the foreign ownership increase to 49 per cent from 20 per cent.
Snapping a bull run
But the stock pulled back later in the day to settle 1.1 per cent down at Dh20.9 as some investors appeared to have seized the opportunity to make profits after eight days of rally transformed their holdings into highly valuable positions.
The other factor working against the stock was that shareholders approved dropping the share buyback programme. A buyback is regarded as bullish for a stock as it reduces the number of traded shares leading to a proportionate increase in investors' ownership percentage and their earnings per share.
However, the stock is still up around 24 per cent for the year after emerging stronger from the pandemic-devastated year and posting higher top- and bottom-line numbers even as many others had their wheels turned back. What also helped was its decision earlier this year to hand out special dividends and push up the ownership limit for non-UAE nationals.
"The UAE was the largest borrower in the Gulf with around $16 billion raised, while Saudi Arabia second with $12 billion. Part of the capital was raised in domestic markets.
"The Saudis returned to the international debt markets earlier this year by issuing 5 billion euros and 1.5 billion in the common currency, taking advantage of the negative yield for the first time."
Banks on the rise
Dubai Financial Market edged up 0.1 per cent at 2,604 points, led all the way by its financial stocks, with Amlak Finance, Emirates NBD, Dubai Islamic Bank ending higher. But gains in financials were overshadowed by property stocks trading lower. Emaar Development posted a second back-to-back slide after its board recommended no dividend payouts for 2020.
Banking stocks also led the Qatari index higher, and so was the case with Kuwait, Oman and Bahrain whose equity markets enjoyed advances.