Saudi stock benchmark Tadawul All Share Index (TASI) took a hammering Sunday as petrochem shares dropped amid disappointing earnings in the second quarter. The index fell 0.71 percent to 6,581.38 points. Saudi Arabian Fertilizers Co. (Safco) slumped to a three-week low after the firm's second-quarter profit missed estimates, sparking selling in other petrochemical stocks. Investors had bet high oil prices would boost petrochemical producers' earnings, so Safco's results sparked sector-wide selling, dragging Saudi Arabia's petrochemicals index down 1.6 percent, its biggest decline in five weeks. Safco's shares dropped 1.9 percent to their lowest finish since June 20 after the company's net profit fell 13 percent in the second quarter to SR790 million ($210.7 million), compared with SR907.2 million in the prior-year period when its results were boosted by sale of land. The company said sales of ammonia declined in the second-quarter and average urea prices were also lower on a sequential basis. Operating profits at Safco rose 36 percent to SR757 million versus SR558 million year-ago. Safco said it would pay a dividend of SR6 a share for the first half of the year. Saudi Arabian Basic Industries Corp. holds a 42.9 percent stake in Safco. Safco shares have gained 17.5 percent year-to-date. "Ammonia and urea prices have increased over 10 percent quarter-on-quarter, so analysts were expecting better earnings from Safco," said Ankit Gupta, senior research analyst at Securities & Investment Co (SICO) in Bahrain. Shares in Saudi Basic Industries Corp. (SABIC), which holds a 43 percent stake in Safco, slid 1.4 percent. Elsewhere, Cairo's benchmark index fell 1.7 percent to a seven-week low as tens of thousands of Egyptians packed city centers over the weekend to demand faster reforms and voice frustration at what they regard as foot-dragging by military rulers and government officials. The measure fell to 5,271 points. Qatar benchmark fell 0.2 percent to 8,488 points. Kuwait measure eased 0.03 percent to 6,211 points. Bahrain measure slipped 0.01 percent to 1,319 points. However, Abu Dhabi and Dubai both registered gains. Dubai index climbed 0.6 percent to 1,567 points. Abu Dhabi index rose 0.3 percent to 2,722 points. Banks lifted Abu Dhabi's benchmark ahead of quarterly results, with lenders' earnings seen as a barometer for the health of the UAE economy. "If any (UAE) sector's shares will move on results, it will be banks - they are the main barometer of the economy and any pick up in loans will be taken very positively by the market," said Rami Sidani, Schroders Middle East head of investment. "The UAE is more of a long-term story and a function of the risk appetite regionally and globally. Investors are waiting to see real estate prices pick up, as well as general sentiment.”
