Tadawul index drops 0.8%; SABIC’s shares fall 0.9%

The Saudi stock market was hit Wednesday by Brent oil’s drop below $48 a barrel. All traded petrochemical shares in Saudi Arabia retreated, with bellwether Saudi Basic Industries (SABIC) falling 0.9 percent. 
The market’s main Tadawul All-Share Index closed down 0.8 percent in this year’s thinnest trading volume. 
Consumer discretionary stocks were among the top losers. 
Retailer Fawaz Alhokair, which owns franchises such as Banana Republic and Starbucks, lost 3.2 percent. 
Gulf shares retreated, with Qatar’s main stock index dropping 2.9 percent as investors booked profits across the board, though Egypt’s main index climbed as investors welcomed economic reforms by the government. 
After Wednesday’s market close index compiler FTSE is expected to release a list of Qatari stocks to be included in its emerging market index from mid-September.
But Qatari blue chips had already risen over the last few weeks in anticipation, taking them to levels many fund managers see as at or above fair value. Such stocks were sold on Wednesday, with Masraf Al-Rayan falling 2.4 percent and Qatar National Bank losing 3.8 percent.
A monthly Reuters poll of leading Middle East fund managers showed sentiment has on balance turned negative toward Qatar for the next three months because of valuation issues.
Dubai’s index edged down 0.3 percent after rising in early trade. GFH Financial fell 1.0 percent, erasing some of its 4.3 percent jump in the previous session. 
Blue chips dragged Abu Dhabi’s index 0.5 percent lower. Union National Bank dropped 3.0 percent and National Bank of Abu Dhabi declined 1.9 percent.
By contrast, Cairo’s main index rose 1.0 percent with a little over half of traded shares gaining. Telecom Egypt, the state-owned landline monopoly, advanced 2.7 percent after saying it had acquired the country’s first 4G mobile license for 7.08 billion Egyptian pounds ($797 million), paving the way for it to become the fourth mobile provider in Egypt. 
El Sewedy Electric, which rose 2.1 percent on Tuesday after reporting a 68 percent jump in second-quarter profit, added a further 3.8 percent on Wednesday.
Parliament has approved several reforms this week including a plan to introduce value-added tax and steps to make settling tax disputes easier.
Wafik Dawood, portfolio manager at Cairo-based Mega Investment Securities, said such reforms were crucial to attracting foreign funds. 
“The proactive steps taken will show just how serious the government is about fixing the problems which have been hindering the country over the last five years,” said Dawood.
He said investors were keen to know how authorities would handle Egypt’s next currency devaluation. 
“All eyes will be on the mechanism of the devaluation, which this time around will come with fiscal reforms — unlike the March devaluation, which was just a change in the price of the currency. 
“Bottom line, a devaluation will be good for the stock market.”

Source: Arab News