October 18, 2016 / 2:46 PM / a year ago

MIDEAST STOCKS-Saudi hit by weak Q3 results at major companies, UAE rebounds

* Saudi’s SAFCO delivers worst net income on record

* Tasnee tumbles 10 percent daily limit

* Banks mixed; Al Rajhi gains but Samba sinks

* Zain Saudi drops on wider Q3 net loss

* Dubai, Abu Dhabi gain before large-cap earnings

* Egypt dips as roughly 3/4 of top 30 shares declining

By Celine Aswad

DUBAI, Oct 18 (Reuters) - Several disappointing third-quarter results from large Saudi Arabian companies dragged on the kingdom’s stock index on Tuesday, while most other Gulf markets edged up in modest trade. Egypt pulled back in falling volumes.

Riyadh’s index fell 1.9 percent, with selling momentum intensifying in the final hour. Saudi Arabian Mining Co (Ma‘aden) fell 1.8 percent after it posted a 4.6 percent rise in third-quarter net profit to 83.6 million riyals ($22.3 million), below analysts’ average forecast of 122.7 million riyals.

National Industrialization Co (Tasnee) swung to a net profit of 122.2 million riyals from a loss of 296.3 million riyals in the prior-year period. But NCB Capital said the result was 18 percent below its expectation and the stock slumped by its daily limit of 10 percent.

Chief Executive Mutlaq al-Morished denied a Bloomberg report that the firm had stopped making payments on a $1 billion loan.

“Ask any bank. This is totally inaccurate. We did not default or delay any payments. Take my word: we do not suspend a billion dollars,” he told reporters.

In an interview with Al Arabiya television, he said Tasnee had begun informal talks with local banks to refinance the loan at better terms, as it had done with a 7 billion riyal facility for its Cristal subsidiary earlier this year, with negotiations set to last at least six months.

Saudi Fertilizer Co (SAFCO) fell 4.2 percent to 62.75 riyals after it posted a 68 percent decline in third-quarter net profit to 181.4 million riyals, missing analysts’ prediction of 249.2 million riyals.

NCB Capital said this was SAFCO’s lowest net income on record, blaming weak gross margins and lower income from Ibn Al-Baytar, a joint venture with Saudi Basic Industries . NCB remains “neutral” on the stock with a 63.40 riyal target.

Sahara Petrochemical tumbled 5.2 percent after posting a 13 percent drop in net income.

Banks were mixed with Al Rajhi Bank adding 1.0 percent after it reported a 16.7 percent rise in profit, meeting forecasts; it was the first major bank in Saudi Arabia to report higher profits for the third quarter.

Analysts at Riyad Capital said there was no major increase in bad loan provisions at the retail-focused bank in the third quarter, contrary to many of its corporate-focused peers.

Samba Financial Group dropped 2.1 after it reported a 2.2 percent drop in quarterly net profit, in line with forecasts. Saudi Hollandi Bank recorded a 46.7 percent fall in profit to 262.8 million riyals; analysts had forecast 506.4 million riyals. Its shares slumped 6.7 percent.

The first Saudi telecommunications operator to report third-quarter results, Zain Saudi, fell 5.8 percent after it reported a third-quarter loss of 267 million riyals. That was in line with expectations but quarterly revenue shrank 7 percent.


Dubai’s index rose 1.4 percent with attention focused on small and mid-sized shares as large-caps have yet to report third-quarter results. Builder Arabtec climbed 3.0 percent and Union Properties added 2.3 percent.

In Abu Dhabi, First Gulf Bank, which has been volatile in recent days, gained 3.8 percent. The main index closed 1.2 percent higher.

Qatar’s index rose 0.6 percent as 85 percent of the traded shares advanced. Qatar National Bank, which reported strong earnings last week, added 1.3 percent.

In Cairo, the index edged down 0.4 percent. Trading volumes were roughly half of those hit on Monday.

Global Telecom Holding, a stock favoured by international investors, lost 4.4 percent and private equity firm Qalaa Holdings closed down 4.4 percent.



* The index fell 1.9 percent to 5,461 points.


* The index rose 1.4 percent to 3,318 points.


* The index gained 1.2 percent to 4,269 points.


* The index slipped 0.4 percent to 8,214 points.


* The index added 0.6 percent to 10,484 points.


* The index dropped 0.1 percent to 5,284 points.


* The index edged up 0.04 percent to 5,584 points.


* The index dipped 0.04 percent to 1,137 points.

Editing by Andrew Torchia and Alison Williams

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