MIDEAST STOCKS-Poor blue chip earnings weigh on Saudi; Egypt tumbles after vote

DUBAI Sun Jan 19, 2014 8:13am EST

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DUBAI Jan 19 (Reuters) - Disappointing earnings from two of Saudi Arabia's largest firms weighed on investors sentiment, while Egypt's market fell in heavy profit-taking after a strong backing for the country's new constitution. Other regional shares were mixed.

Saudi Basic Industries Corp (SABIC), the world's largest chemicals producer and the biggest listed firm in the region by value, dropped 2.3 percent after its quarterly earnings missed estimates.

The firm reported a 5.7 percent rise in fourth-quarter net income to 6.16 billion riyals ($1.64 billion) in the quarter, below the average forecast of 6.58 billion riyals.

Other petrochemical shares were also hit with SABIC subsidiary Kayan Petrochemical losing 5 percent and Rabigh Refining and Petrochemical down 5.9 percent.

Iyad Ghulam, an analyst from Saudi Arabia's NCB Capital, said in a note that lower sales and weak earnings from SABIC subsidiaries were to blame for its miss but the stock remains attractive, underpinned by long-term earnings growth.

Saudi Arabia's largest lender Al Rajhi Bank shed 0.4 percent, recovering most of early-session losses triggered by its 19.1 percent drop in quarterly profit.

The bank made 1.55 billion riyals in the fourth quarter, missing analysts' average forecast of 1.99 billion riyals.

Rajhi cited higher costs for the drop, which analysts believe may be due to troubles in the construction sector where a government crackdown on illegal immigrants resulted in a labour shortage, but the impact is expected to be short-term.

"Saudi fundamentals remain intact and growth prospects remain - so we're bullish on the market as a whole, which continues to offer great opportunities," said Rami Sidani, Schroders Middle East head of investment.

Saudi Arabia's index slipped 0.2 percent, coming off Thursday's five-year high.

In Egypt, the index tumbled 2 percent, extending declines from last Tuesday's three-year high when the country began voting on a new constitution.

Over 98 percent of voters backed the draft in a referendum last week, authorities said on Saturday, though the turnout was lower than some officials had indicated, with under 40 percent of the electorate taking part.

"It's a traditional buy-the-rumour, sell-the-news situation," said Mohamed Radwan, director of international sales at Pharos Securities. "Everyone had already predicted it would be an overwhelming vote on the constitution - today the market is just taking a breather."

On the 30-stock index, 28 firms retreated, one gained and one was flat.

Elsewhere, Dubai's bourse gained 0.2 percent, up for its seventh consecutive session as a buying spree in real estate shares continued. It hit a new five-year high.

Large-caps also helped lift Abu Dhabi's index to a fresh five-year high, as it added 0.9 percent.

Qatar's bourse snapped a 13-session winning streak and slipped 0.1 percent.

SUNDAY'S HIGHLIGHTS

SAUDI ARABIA

* The index slipped 0.2 percent to 8,740 points.

EGYPT

* The index dropped 2 percent to 7,003 points.

DUBAI

* The index gained 0.2 percent to 3,618 points.

ABU DHABI

* The index rose 0.9 percent to 4,562 points.

QATAR

* The index declined 0.1 percent to 11,093 points.

OMAN

* The index eased 0.02 percent to 7,139 points.

KUWAIT

* The index gained 0.4 percent to 7,699 points.

BAHRAIN

* The index was flat a 1,269 points. (Editing by Olzhas Auyezov)

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