JEDDAH – Saudi Arabian petrochemical firms dragged down the bourse Sunday after Saudi Kayan, a unit of Saudi Basic Industries Corp (Sabic), reported a widening quarterly loss. The Kingdom's stock benchmark Tadawul All Share Index lost 0.6 percent to 6,663 points, trimming year-to-date gains to 3.8 percent. Saudi Kayan dropped 6.4 percent to close at its lowest since July 2009. Its net loss for the second quarter surged to SR328.3 million ($87.5 million), according to a statement to the Saudi bourse. This compares with a loss of SR16 million in the year-earlier period. "Higher losses resulted from a decline in product prices combined with more expensive surplus inventory," Riyad Capital said in a note. "Kayan missed our net profit estimate of SR69 million as well as the SR101 million consensus." Investors fear Kayan's losses are a weak indication for Sabic's earnings. Chemicals giant Sabic shares fell 1.7 percent to their lowest close since March 2011. Analysts polled by Reuters on average expect the chemicals giant to post an 18.8 percent drop in quarterly profit. Saudi Arabian Fertilizers Company (Safco), also a Sabic unit, ended flat, a day after it reported below-forecast second-quarter earnings. "The market is weighed down by Safco and Kayan's numbers, which ultimately means Sabic is not going to be good when they announce," said Asim Bukhtiar, head of research at Riyad Capital. "There could be a relief rally if Sabic matches estimates, but it looks like sentiment is turning bearish on the sector." Developer Dar Al Arkan slipped 1.1 percent, accounting for almost a third of all shares traded as investors lock in gains from Saturday's 9.2 percent jump. It surged after the builder said it transferred $1 billion to repay its Islamic bond, or sukuk. The stock has been trading heavy volumes recently. The bourse website announced on Sunday that Mercury Securities is a new major shareholder in the developer, with a 5.3 percent stake. Elsewhere, Qatar index eased 0.02 percent to 8,283 points. Oman index gained 0.4 percent to 5,468 points. Kuwait index dipped 0.1 percent to 5,855 points. Dubai measure gained 0.8 percent to 1,503 points. Abu Dhabi benchmark slipped 0.2 percent to 2,461 points. Bahrain measure declined 0.1 percent to 1,113 points. In Egypt, the index dropped 2 percent to 4,719 points. Investors fretted that newly-elected President Mohamed Mursi's delay in appointing a new government and the country's other problems may hinder progress toward fixing the economy. "Investors don't see any clarity. There is a delay in appointing a prime minister and there are challenges to the constitutional committee in the courts," said Hisham Halaldeen of Naeem Brokerage. More than three weeks after having been declared winner of Egypt's presidential election, Mursi has yet to name his prime minister or a government. Real estate companies declined, with Palm Hills dropping 4.5 percent, Talaat Moustafa 3.3 percent and Amer Group 4.4 percent. Emaar Properties ended at a 10-week high, up 1.6 percent, as investors bought ahead of its second-quarter earnings, helping lift Dubai's bourse. Three analysts polled by Reuters expect the developer to post an average profit of AED516.3 million ($140.57 million), which would be a 106 percent increase on the year-earlier period. Dubai's index climbed 0.8 percent. The benchmark has traded within a 75-point range over the past two months and is unlikely to break out of this pattern during a summer lull, with many investors on vacation. Oil rose to near $87 a barrel Friday even as economic growth in China, the world's second-largest crude consumer, slowed in the second quarter to a three-year low. – SG/Reuters
