Declines in property stocks and continuous fall of oil prices dampened performance of the Gulf markets on Wednesday. Oil prices fell below $65 a barrel Wednesday with more signs emerging that consumers are cutting back where they can, notably on energy costs. Benchmark crude for September delivery lost $2.84 to $64.39 a barrel on the New York Mercantile Exchange. In London, Brent prices fell $1.66 to $68.22 a barrel on the ICE Futures exchange. Saudi Arabia's index ended almost flat as a late rally in petrochemical stocks limited losses. Saudi Basic Industries Corp (SABIC) and Saudi Kayan Petrochemical Co ended 1.1 and 1.4 percent higher. “Overall corporate earnings have improved from the fourth quarter to the first quarter and from the first quarter to the second quarter,” said Shakeel Sarwar, Sico investment bank head of asset management. “There is a clear uptrend and petrochemicals are the main driver of this after being worst performing sector in the fourth quarter.” The Tadawul All Share Index (TASI) inched down 0.01 percent to 5,778.14 points as volumes slipped to a two-week low. “The markets are not falling sharply and there is less volatility than a few months ago,” said Sarwar. “The close is some way above the intraday low, which shows that when prices drop, bargain hunters come in and buy towards the end of the session.” Abu Dhabi's index took a first reverse in 11 sessions, while Dubai's index ended lower for a third day. Abu Dhabi Commercial Bank fell 2.1 percent and First Gulf Bank slipped 0.9 percent. Dubai Islamic Bank and Emirates NBD lost 1.2 and 0.3 percent respectively. “The regional talking point has been the troubled Saad and Algosaibi groups and it is inconceivable there will only be two family companies in difficulties, there must be more and we need to know about them,” said Sanyalaksna Manibhandu, Emaar Saudi Financial Services head of research. Struggling Saudi conglomerates Saad Group and Ahmad Hamad Algosaibi & Bros are restructuring billions of dollars of debts. Earlier this month, Algosaibi filed a lawsuit in New York against Maan al-Sanea, the billionaire head of the Saad Group, in a case involving allegations of $10 billion in loan irregularities, according to court documents. National Bank of Abu Dhabi surged 7.5 percent after the company announces plans for a 10 percent share buy back. It posts a 9.3 percent drop in second-quarter profit after taking provisions worth AED500 million ($136.1 million) in the first half of 2009. “Banks that have provisioned heavily are doing the right thing - they're frontloading the bad news and should benefit going forward,” said Manibhandu. “The banks that have been giving the right information will be rewarded by the market, because investors will see that bad news has been provided for.” Abu Dhabi-listed Aldar Properties fell 1.5 percent after quarterly profit plunged 80 percent. Abu Dhabi's index fell 0.1 percent to 2,760 points. Dubai's benchmark dropped 0.9 percent to 1,811 points. “Dubai is holding above 1,800 points and is not going to fall to new lows - there are people who are picking up stocks whenever there is a bad down day,” said Manibhandu. “Money is waiting on the sidelines to come back in. In terms of volumes, trading will be lackluster for the next few weeks at least.” Zain was the main drag on Kuwait's index on Wednesday, which ended lower for the second day in three as Gulf markets track declines in emerging and global markets. Zain fell 3.1 percent. Zain has been the focus of feverish speculation after the company said it was considering selling its African operations, while Abu Dhabi-listed Emirates Telecommunications Corp (Etisalat) said it would be interested in buying a controlling stake in the Kuwaiti operator. Kuwait's index dropped 1 percent to 7,637 points, with Gulf Bank falling 3.1 percent to 0.31 dinars. Industries Qatar (IQ) fell 2.6 percent, heading losers on Doha's index as declining oil prices spurred selling in blue chip stocks. The benchmark dropped 0.6 percent to 6,637 points. Eight of the 10 largest stocks declined and two rose. In contrast, of the 10 smallest stocks, seven advanced and two fell. Foreign funds only traded the large-cap stocks, with the smaller companies the preserve of local investors. So Wednesday's performance suggests broad selling by non-Qatar traders, with locals chasing profits in the more obscure names. Bahrain's index slipped 0.1 percent to 1,497 points. Oman's index ended lower for a second day as declining oil prices saps confidence and Bank Dhofar posted a slight drop in half-year profit. The lender fell 1.2 percent to 581 baisas. Its half-year profit slipped 3.4 percent. There are 1,000 baisas to the rial. “The results are per market expectations, but the share has a pretty good run up and is the most expensive among its peers, profit-booking should take it to 560 baisas in the coming week,” said Sunil Dhall, an independent market analyst. Oman Telecommunications Co (Omantel) slid 1.5 percent and National Bank of Oman lost 1.7 percent. The index fell 0.9 percent to 5,870 points, declining for the second day since hitting a 2009 closing high on Monday. Volumes dropped by almost a third from the day before.
