June 17, 2012 / 1:11 PM / 7 years ago

MIDEAST STOCKS-Saudi rebounds, no impact from Nayef death

DUBAI, June 17 (Reuters) - Saudi Arabia’s main stock index rose on Sunday, recovering the previous day’s losses as the death of the kingdom’s crown prince ceased to have an impact.

Qatar’s index was again weak and Bahrain steady, while markets in the United Arab Emirates, Kuwait and Oman were closed for a religious holiday. Egypt was also shut for the country’s presidential election.

Saudi Arabia’s benchmark rose 0.4 percent. It fell 0.3 percent on Saturday, having been down as much as 2.6 percent intra-day in a knee-jerk reaction to Crown Prince Nayef’s death eight months after he became heir to the throne. The index is now down 14.8 percent from early April’s 3-1/2 year peak, as declines in oil and world equity prices have spurred local selling.

“Yesterday’s volatility was to be expected when we have this kind of news, but the market then recovered and I don’t think it will be major factor today - Prince Nayef was known to have had health problems so his death wasn’t a complete surprise,” said a Riyadh-based fund manager, asking not to be identified.

“The authorities will probably give some clarity on the succession soon and today’s trading will be more linked to what’s happening outside the region.”

Although Nayef was known for his strong management of security issues in the country, analysts see no reason to think foreign or political policies, much less economic policies, will change under his successor.

Gains in world markets on Friday helped support Saudi sentiment. Investors fear Sunday’s Greek elections could unleash fresh turmoil in the euro zone if the next government in Athens scraps Greece’s bailout deal, but this is offset by hopes that the world’s major central banks will make a coordinated response to ease any market dislocation.

In Saudi Arabia, shares in telecoms operator Etihad Etisalat (Mobily) climbed 2 percent and Saudi Basic Industries Corp rose 0.8 percent. Saudi firms are expected to start announcing second-quarter earnings from early July.

“Q2 results will help at least to stabilise the market, but these will be of secondary importance compared with what’s happening in Europe, which is flitting between risk-on and risk-off mode,” said the fund manager.

“We should see some buying in select names ahead of results, particularly petrochemicals - people are expecting bad results, but not as bad as recent price movements would justify.”

The petrochemicals index climbed 0.4 percent, trimming its year-to-date losses to 4.7 percent. The sector has loosely tracked declines in oil prices, with crude seen as a key indicator for both petrochemical product prices and likely demand.


In Doha, the main index slipped 0.01 percent to its lowest close since Oct. 6. This took its 2012 losses to more than 6 percent, making it the worst performing Gulf Arab benchmark. About 1.83 million shares traded, the lowest total since July 2011.

“Volumes have been going down lately and I don’t think it will get better anytime soon,” said a Doha-based trader on condition of anonymity.

“Foreign investors have been selling aggressively to invest in other markets and Qatar trading has slumped - things look anaemic, with a lack of catalysts and better opportunities for investors elsewhere.”

Vodafone Qatar fell 0.3 percent. The loss-making telecommunications operator is among the top-performing Doha-listed stocks this year, rising nearly 20 percent, but has fallen 2.5 percent since June 7, when it reported a fourth-quarter net loss of $35 million, missing an analyst’s estimate.

NBK Capital last week cut its rating on Vodafone Qatar to hold from accumulate.


* The index rose 0.4 percent to 6,754 points.


* The benchmark slipped 0.01 percent to 8,251 points.


* The measure rose 0.1 percent to 1,132 points.

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