DUBAI, May 1 (Reuters) - Saudi stocks were down 0.6 percent in late morning trade on Tuesday as investors sold on concerns about rich valuations for blue-chip stocks after a rally this year.
Most Gulf markets were lower with Dubai falling 1.4 percent.
Al Rajhi Bank dropped 1.4 percent despite reporting a 7.3 percent rise in first-quarter net profit on Tuesday, marking the ninth quarter of earnings growth in a row.
The profit was in line with analysts’ forecasts, but gave little incentive for investors to buy more after the stock’s surge this year. It has gained 28 percent.
The Saudi benchmark index has eased after surging past the 8,300-point level last week to its highest level since August 2015. On Tuesday, it was trading at 8,161 points.
Foreign funds were net sellers last week, taking profits after the market’s run-up this year ahead of FTSE Russell’s decision to upgrade Riyadh to emerging market status, said Faisal Potrik, head of research at Riyad Capital.
With two weeks to Ramadan, market activity is likely to slow down, he said, but he expects buying interest will return ahead of index compiler MSCI’s decision in June on whether to upgrade Saudi Arabia to emerging market.
In the week through last Thursday foreigners were net sellers to the tune of $48 million, stock exchange data showed.
Dubai stocks fell 1.4 percent, hurt by selling in DAMAC Properties which tumbled 6.5 percent, while contractor Drake and Scull (DSI) plunged nearly 10 percent on news that it did not get approval to increase its capital via a new strategic partner.
The announcement by Abu Dhabi investor Tabarak, which owns a 5.5 percent stake in DSI, that it has not sold any shares in the company and reassured its long-term commitment to the company, failed to provide support to the stock.
Emaar Properties, however, rose 0.9 percent after reporting an 8.5 percent increase in net profit on Tuesday on the back of strong contributions from its shopping malls business despite a weaker property market.
In Qatar, Vodafone Qatar rose more than 1.6 percent in early trade, but quickly lost of its gains due to retail selling in the Qatar market. It was up 0.4 percent in late morning trade.
The company recorded a net profit of 17.5 million riyals ($4.8 million), rebounding from a net loss of 74.2 million in the first quarter of 2017. This was the company’s first ever quarterly profit as revenue was boosted by postpaid subscribers and handset sales.
Qatari stocks were down 0.6 percent, weighed down by financials. Qatar National Bank dropped 0.7 percent.
$1 = 3.6400 Qatar riyals Reporting by Saeed Azhar; Editing by Susan Fenton