Saudi Arabia's stock market benchmark Tadawul All Share Index (TASI) index dropped 0.42 percent to 6,291.39 points on Monday's trading, its second straight decline, over disappointing bank earnings results in the fourth quarter of 2009. Saudi bank shares tumbled in the process, weighing on the index, as most Middle East bourses retreated in thin trading as cautious investors awaited further results. Saudi Hollandi Bank fell 3.8 percent after posting its first quarterly loss for two years and Banque Saudi Fransi dropped 3.6 percent after its fourth-quarter profit dropped 43 percent. Both lenders blamed rising provisions for below-forecast earnings. Samba Financial Group also fell as its own profit missed estimates. “I expected a bigger drop in the market, so the reaction has been quite good (to the trio of bank results),” said Hesham Abo-Jamee, Bakheet Investment Group head of asset management. “Today's fall is acceptable after the results and I don't think it will fall more than 1 percent after tomorrow,” added Abu-Jamee. Elsewhere in the region, Dubai's index slipped to a two-week low, Kuwait fell for the first session in three. Abu Dhabi and Qatar also declined, with only Bahrain and Oman rising, the latter edging up 0.1 percent to an 11-week high. Dubai Index fell 0.6 percent to 1,803 points. Abu Dhabi benchmark dropped 0.2 percent to 2,775 points. Kuwait benchmark fell 0.2 percent to 7,048 points. Qatar measure dropped 0.4 percent to 7,005 points. However, Oman and Bahrain indices rose 0.1 percent to 6,605 points and 0.8 percent to 1,464 points, repectively. Dubai's Arabtec declined for a second day since agreeing to sell a majority stake to Aabar Investments. The $1.7 billion deal will be through convertible bonds, diluting existing holdings. Arabtec fell 3.4 percent to AED2.60 ($0.71), while Aabar slipped 1.6 percent, having risen 11 percent since Wednesday. “Buyers with a long-term view continue to mop up Arabtec into weakness and give short term traders an exit,” said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading. “This comes down to two points of view, you either are looking at the long-term value that can be created by the Aabar involvement and the cash injection or you are focusing on the dilution of the shares short term.” Arabtec's stock will remain volatile until AED2.30 a share deal is approved, said Mohammed Yasin, Shuaa Securities chief executive.
