Saudi drops on blue-chip weakness, Dubai hurt by DSI

The Dubai index was down 0.4%, hurt by continued weakness in DSI, which fell 3.7% and hit a record low in early trading. (AFP pic)

DUBAI: Gulf stocks were mostly lower on Sunday morning, with Saudi Arabia under pressure after closing at a six-month low in the previous session and Dubai hit by continued selling in contractor Drake & Scull International .

Declines in key blue-chip stocks pushed down the Saudi market by 0.2% in early trade.

Shares of top petrochemical firm Saudi Basic Industries were down 0.3% and refining firm Petro Rabigh fell 0.9%.

Banks were also weak.

JPMorgan said in its weekly report on Middle East and North Africa that recent earnings data in Gulf countries had generally been positive, but emerging market volatility continued to weigh on regional markets.

Saudi Real Estate, however, was up 5% after its unit Al Widyan Co awarded a 1.1 billion riyals (US$293 million) contract to a company to develop key infrastructure on a site in the northern growth corridor of Riyadh.

The Dubai index was down 0.4%, hurt by continued weakness in DSI, which fell 3.7% and hit a record low 0.376 dirhams (US$0.1024) in early trading.

DSI stock plunged 10% on Wednesday after the company said shareholders would meet Sept 27 to decide whether to dissolve it, under an article of United Arab Emirates company law requiring firms to vote on whether they should continue operating if their accumulated losses have reached half of issued share capital.

Even a supporting statement from key shareholder Tabarak failed to lift sentiment.

Tabarak Investment, DSI’s biggest shareholder with 13.73%, told Reuters in statement at the weekend it was committed to restoring DSI to financial health, and had arranged for the company to obtain over 1 billion dirhams of projects.

Dubai’s top stock, Emaar Properties, was also down 1.2% in early trade.

The Abu Dhabi index was up 0.6 %, supported by Abu Dhabi National Energy which was trading 4.4% higher, while market heavyweight First Abu Dhabi Bank also gained 0.8%.

In Qatar, the index dropped 0.7%, easing from a 16-month high in the previous session, as blue-chip stocks traded lower. Industries Qatar dropped 0.9% and Masraf Al Rayan fell 0.3%.

Kuwaiti stocks continued to outperform Gulf markets ahead of the first part of their inclusion into the FTSE Russell emerging market index on Sept 24. The premier index was up 0.4%in early trade, taking year-to-date gains of 11.6%.