Saudi stocks hit by weak Q3 results at major companies

Several disappointing third-quarter results from large Saudi Arabian companies dragged on the kingdom’s stock index on Tuesday, while most other Gulf markets edged up in modest trade. Egypt pulled back in falling volumes.
Riyadh’s index fell 1.9 percent, with selling momentum intensifying in the final hour. Saudi Arabian Mining Co. (Maaden) fell 1.8 percent after it posted a 4.6 percent rise in third-quarter net profit to SR83.6 million ($22.3 million), below analysts’ average forecast of SR122.7 million.
National Industrialization Co. (Tasnee) swung to a net profit of SR122.2 million from a loss of SR296.3 million in the prior-year period. 
But NCB Capital said the result was 18 percent below its expectation and the stock slumped by its daily limit of 10 percent.
CEO Mutlaq Al-Morished denied a Bloomberg report that the firm had stopped making payments on a $1 billion loan.
“Ask any bank. This is totally inaccurate. We did not default or delay any payments. Take my word: we do not suspend $1 billion,” he said.
In an interview with Al Arabiya television, he said Tasnee had begun informal talks with local banks to refinance the loan at better terms, as it had done with an SR7 billion facility for its Cristal subsidiary earlier this year, with negotiations set to last at least six months.
Saudi Fertilizer Co. (SAFCO) fell 4.2 percent to SR62.75 after it posted a 68 percent decline in third-quarter net profit to SR181.4 million, missing analysts’ prediction of SR249.2 million.
NCB Capital said this was SAFCO’s lowest net income on record, blaming weak gross margins and lower income from Ibn Al-Baytar, a joint venture with Saudi Basic Industries Corp. NCB remains “neutral” on the stock with an SR63.40 target.
Sahara Petrochemical tumbled 5.2 percent after posting a 13 percent drop in net income.
Banks were mixed with Al-Rajhi Bank adding 1.0 percent after it reported a 16.7 percent rise in profit, meeting forecasts; it was the first major bank in Saudi Arabia to report higher profits for the third quarter.
Analysts at Riyad Capital said there was no major increase in bad loan provisions at the retail-focused bank in the third quarter, contrary to many of its corporate-focused peers.
Samba Financial Group dropped 2.1 after it reported a 2.2 percent drop in quarterly net profit, in line with forecasts. Saudi Hollandi Bank recorded a 46.7 percent fall in profit to SR262.8 million; analysts had forecast SR506.4 million. Its shares slumped 6.7 percent.
The first Saudi telecommunications operator to report third-quarter results, Zain Saudi, fell 5.8 percent after it reported a third-quarter loss of SR267 million. That was in line with expectations but quarterly revenue shrank 7 percent.

UAE REBOUNDS

Dubai’s index rose 1.4 percent with attention focused on small and mid-sized shares as large-caps have yet to report third-quarter results. Builder Arabtec climbed 3.0 percent and Union Properties added 2.3 percent.
In Abu Dhabi, First Gulf Bank, which has been volatile in recent days, gained 3.8 percent. The main index closed 1.2 percent higher.
Qatar’s index rose 0.6 percent as 85 percent of the traded shares advanced. Qatar National Bank, which reported strong earnings last week, added 1.3 percent.
In Cairo, the index edged down 0.4 percent. Trading volumes were roughly half of those hit on Monday.
Global Telecom Holding, a stock favored by international investors, lost 4.4 percent and private equity firm Qalaa Holdings closed down 4.4 percent.

Source: Arab News