Tadawul: Weak petchem stocks lead market lower

Qatar’s main stock index fell sharply for a second straight day on Thursday after FTSE published a list of stocks to be included in its secondary emerging market index, while Saudi Arabian petrochemical stocks sagged because of weak oil prices.
Petrochemical shares in Saudi Arabia declined after Brent oil futures fell back below $47 a barrel. The main Saudi Tadawul All-Share Index dropped 1.0 percent in the highest volume in 11 days, with Yanbu National Petrochemicals (Yansab) losing 1.2 percent. 
Consumer discretionaries, which have been sluggish over the last several weeks, continued to drop with retailer Fawaz Alhokair declining 1.0 percent and discount supermarket operator Al-Othaim Market retreating 3.6 percent.
Doha’s index initially rose but closed down 1.4 percent, taking its losses for the week to 3.0 percent. 
Although Qatar’s upgrade to emerging market status is widely seen as positive for the market, investors had bought up stocks in anticipation of the list’s publication in recent weeks, leaving many shares at or above analysts’ estimates of fair value.
A monthly Reuters poll of Middle East fund managers, published on Wednesday, found them turning negative on Qatar for the next three months because of valuations. 
Only one of the 22 stocks due to join the FTSE index on Sept. 20 rose on Thursday; United Development Co, which had underperformed other eligible shares, climbed 2.1 percent. 
Among other FTSE constituents, Qatar National Bank lost 1.2 percent and telecommunications operator Ooredoo declined 1.9 percent.

The Reuters poll found fund managers bullish on the UAE by a large margin. Dubai’s main index climbed 0.2 percent in the highest volume in two weeks, with most turnover coming from small and mid-sized shares. 
Shuaa Capital, which was providing market-making services for the launch of single-stock futures on major UAE companies on Thursday, rose 3.4 percent. Dubai Parks and Resorts added 1.8 percent.
“Markets in the UAE were slightly up today because of higher volumes as some investors are taking positions in anticipation of the US jobs data report due on Friday, which will help give some clearer guidance on the prospects of an interest rate hike,” said Mohammed Shabbir, independent investment adviser for Dubai-based Value IQ. 
In Abu Dhabi, the index nudged up 0.2 percent, buoyed by gains in blue chips such as First Gulf Bank, up 1.3 percent, and Aldar Properties, up 0.7 percent. 
Cairo’s main index edged down 0.3 percent as 70 percent of traded shares retreated, trimming some of Wednesday’s 1.0 percent gain. 
Telecom Egypt, which rose 2.7 percent on Wednesday after saying it had acquired the country’s first 4G mobile license, shed 1.0 percent to 10.00 Egyptian pounds. 
In an interview with Al-Arabiya television, the company’s chief executive Tamer Gadallah said a large portion of the 7.8 billion pound ($878 million) cost of the license had already been paid and the firm also planned to offer 2G and 3G services via other carriers? networks. 
He also said there was no plan to sell the company’s stake in Vodafone 
Analysts at Naeem Brokerage said the terms of the 4G agreement came as no surprise.
“However, for the time being, dividend pay-out sustainability is our main worry, as license payments coupled with mobile services-related expenditures could drain TE’s cash position,” said Naeem, which cut its recommendation for the stock to “hold” but maintained a price target of 11.00 pounds.

Source: Arab News