May 2, 2017 / 2:11 PM / 6 months ago

MIDEAST STOCKS-Saudi's SABIC slips after Q1 results; Gulf sluggish on oil but Egypt up

* Saudi non-oil industrials up before deputy crown prince speaks

* Kuwait’s Warba Bank climbs on Q1 results

* Top UAE property developers rise ahead of earnings

* Qatar worst performer; regional funds bearish, poll finds

* Egypt follows emerging markets higher

By Celine Aswad

DUBAI, May 2 (Reuters) - Shares in petrochemical giant Saudi Basic Industries (SABIC) fell on Tuesday after the company reported first-quarter results, while most equities in the Gulf were sluggish as oil prices traded near five-week lows. Egypt followed emerging markets higher.

SABIC posted a first-quarter net profit of 5.24 billion riyals ($1.40 billion), up 80 percent from the same period last year and broadly in line with analysts’ average forecast of 5.35 billion riyals.

Analysts at NCB Capital said in a note that profits rose because of higher petrochemical margins due to an increase in product spreads, as well as higher fertiliser margins due to stronger urea prices.

“Higher operational efficiency, strong balance sheet and an attractive dividend yield of 5 percent are the key strengths of the stock. The stock is trading at a forward 2017 price-to-earnings ratio of 15.6 times, lower than the sector average of 16.6 times,” NCB Capital said.

Nevertheless, SABIC shares fell 0.8 percent after three days of strong gains in anticipation of the earnings announcement. The Saudi stock index closed 0.1 percent higher.

Some investors took positions in non-oil industrial companies ahead of a Saudi television interview with Deputy Crown Prince Mohammed bin Salman, which television executives said would be broadcast later in the day.

Prince Mohammed was expected to discuss government plans to expand housing and industrial projects in the kingdom as part of economic reforms.

Emaar the Economic City (EEC) jumped 4.6 percent in its heaviest trade since late March; the company is developing a huge industrial zone including residential space. Saudi Automotive Services, which could benefit from the government’s desire to create a domestic auto industry, climbed 3.9 percent in its heaviest trade since early January.

Saudi Telecom rose 0.7 percent after it applied to become the third mobile operator in Oman. On Tuesday Kuwait’s Zain Group submitted a bid for the licence. A shortlist of applicants will be announced on Aug. 14 with the winner revealed on Sept. 4, the companies said. Zain’s shares in Kuwait, however fell 2.3 percent.

Warba Bank rose 1.6 percent after the Kuwaiti lender’s first-quarter net income almost quadrupled from a year earlier to 1.3 million dinars ($4.3 million). Kuwait’s stock index, however, fell 0.5 percent.

Dubai’s index edged down 0.1 percent as some of the previous session’s top performers fell on profit-taking. Healthcare and education investment company Amanat Holdings lost 0.9 percent after its 4.5 percent surge on Monday. Builder Arabtec, the most heavily traded stock of the day, dropped 1.8 percent.

Emaar Properties, which was expected to report first-quarter earnings after the close, rose 1.2 percent.

In Abu Dhabi, Aldar Properties, which was also expected to report earnings imminently, jumped 2.8 percent while the index slipped 0.1 percent.

Qatar’s index dropped 1.2 percent to a fresh 20-week low as three-quarters of blue-chip shares declined. The largest listed lender by assets in the Gulf, Qatar National Bank , fell 2.5 percent.

A Reuters survey this week showed that regional funds had turned moderately negative on balance towards Qatari shares, citing relatively high valuations and unexciting first-quarter earnings.

QNB, for example, is trading at a forward price-to-earnings ratio of 9.9 times while its regional peers are around 8.8 times, according to Thomson Reuters data.

The index in Egypt, which was closed on Monday, rose 0.8 percent. Shares which are constituents of international emerging market benchmarks advanced with real estate investor Talaat Mostafa Group adding 1.1 percent and Commercial International Bank up 0.6 percent.

TUESDAY‘S HIGHLIGHTS

SAUDI ARABIA

* The index added 0.1 percent to 7,013 points.

DUBAI

* The index edged down 0.1 percent to 3,437 points.

ABU DHABI

* The index slipped 0.1 percent to 4,553 points.

QATAR

* The index dropped 1.2 percent to 9,993 points.

EGYPT

* The index added 0.8 percent to 12,530 points.

KUWAIT

* The index fell 0.5 percent to 6,759 points.

BAHRAIN

* The index added 0.2 percent to 1,338 points.

OMAN

* The index lost 0.3 percent to 5,510 points.

Editing by Andrew Torchia

Our Standards:The Thomson Reuters Trust Principles.
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