Reuters logo
MIDEAST STOCKS-Saudi may stay weak before Q2 results, political stalemate may stall Doha
July 5, 2017 / 5:49 AM / 5 months ago

MIDEAST STOCKS-Saudi may stay weak before Q2 results, political stalemate may stall Doha

DUBAI, July 5 (Reuters) - The Riyadh stock index may remain weak on Wednesday as investors are reluctant to buy before seeing second-quarter earnings, while Qatar could move little as a diplomatic stalemate continues.

Saudi Arabia’s index tumbled 2.6 percent on Tuesday. “Retail investors have booked profits ahead of second-quarter results, and there will be weak volumes until those start coming in,” said a Jeddah-based fund manager.

Second-quarter earnings announcements are due to start around mid-July. Alrajhi Capital said in a note that it expected consumer-related sectors to do well because of the reinstatement of civil servants’ allowances and the month of Ramadan, which traditionally sees a pick-up in consumer spending.

Bank earnings may be flat to mildly higher, but Alrajhi expects a poorer performance from the heavyweight petrochemical sector because of weaker oil prices.

In Doha, the stock index may stay near January 2016 lows ahead of a meeting by the four Arab states which are boycotting it later in the day in Cairo.

A deadline for Doha to comply with the four states’ demands officially expired overnight; Qatar has submitted replies to the demands to mediator Kuwait but nobody has disclosed what those replies are.

It has shown no sign of acquiescing to major demands, which raises the possibility of the four states imposing more sanctions, but it is not clear that any fresh steps - such as the withdrawal of deposits from Qatar’s banking system - would be crippling, given Doha’s large financial resources.

Overnight, debt rating agency Moody’s changed Qatar’s rating outlook to negative but affirmed the rating Aa3, suggesting it does not expect major damage to the economy in the short term at least. ​

In Dubai, DAMAC Properties may attract some interest after saying its international arm had hired a former HSBC executive to speed up its expansion in the United Kingdom and Europe.

The global environment offers little direction with Brent crude oil about 45 cents shy of $50 a barrel and Asian shares moving little. (Reporting by Celine Aswad; Editing by Andrew Torchia)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below