Last Updated: Wed Jun 22, 2011 16:15 pm (KSA) 13:15 pm (GMT)

Saudi index down, UAE slips in reaction to MSCI decision

The benchmark Saudi index eases 0.2 percent to 6,449 points, inching towards Monday's 12-week low. (File Photo)
The benchmark Saudi index eases 0.2 percent to 6,449 points, inching towards Monday's 12-week low. (File Photo)

Saudi Arabia's index reverses early-session gains after impact of the Greek government's confidence vote in parliament waned, prompting some investors to switch focus to the United States Federal Reserve.

The Fed is likely to acknowledge renewed weakness in the US economy and reiterate its commitment to keep interest rates low for an extended period. Global shares retreat on Wednesday.

The benchmark Saudi index eases 0.2 percent to 6,449 points, inching towards Monday's 12-week low.

Local investors are looking at cues from global markets amid a lack of fundamental catalysts, and await second-quarter earnings season which commences in about three weeks.

"We're going to start looking solely at home at how the numbers pan out," says a Riyadh-based fund-manager who asked not to be identified.

"Crude is still at elevated levels and has been for the quarter. We should see decent numbers, especially for the petrochems sector," he adds.

Brent crude for August falls 29 cents to $110.66 a barrel by 1116 GMT. The price is well above the range deemed healthy for Saudi oil producers' margins, according to analysts.

But reacting in the short-term, large-cap stocks Saudi Basic Industries Corp drops 0.7 percent, Al-Rajhi Bank slips 0.4 percent and Saudi Electrity Company sheds 0.7 percent.

Dubai's index slips after index compiler MSCI delays the decision to upgrade UAE and Qatar markets to emerging market status, while Abu Dhabi is flat.

MSCI will announce its verdict in December to allow sufficient time for participant feedback of a new payment system, while adding Qatar needs to increase foreign ownership limit on stocks, it says in a statement.

"I don't think investors in either markets were expecting an upgrade so this is a favorable outcome," says Arindam Das, head of HSBC's securities services for Middle East, North Africa.

Dubai's benchmark slips 0.9 percent to 1,564 points.

Dubai Financial Market falls 3.9 percent, Emaar Properties drops 1.9 percent and Arabtec down 2.2 percent.

Abu Dhabi's index eases 0.02 percent to 2,731 points, down for a third straight session. Dana Gas falls 1.6 percent and Aldar Properties drops 1.5 percent.

Comments »

Post Your Comment »

Social Media »