DUBAI, Oct 4 (Reuters) - The banking sector helped the Saudi Arabian stock index outperform the region in early trade on Wednesday, but shares of a Saudi insurer were knocked lower after the financial regulator issued it with a warning.
The Riyadh index was up 0.4 percent after 45 minutes of trade with the main support coming from the banking sector; National Commercial Bank was up 0.8 percent.
Analysts at Al Rajhi Capital estimate the sector’s profits rose mildly in the third quarter because of higher net interest margins and broadly flat bad loan provisions. Saudi firms are expected to release quarterly results late this month.
Mediterranean and Gulf Cooperative Insurance (MedGulf) slumped 4.1 percent in relatively active trade after saying it had received a warning from the central bank, which told the company to improve its capital adequacy ratio by Dec. 31 or be suspended from issuing new insurance policies.
This year the regulator has cracked down on many insurance companies. Shares of SABB Takaful, which had dropped 3.6 percent on Tuesday after the regulator temporarily stopped it from issuing or renewing insurance or savings products, citing weaknesses in the firm’s internal controls, fell a further 0.3 percent on Wednesday morning.
Qatar’s index lost 0.7 percent to a fresh five-year intra-day low. Commodity-related stocks were some of the worst performers; oil and gas drilling service provider Gulf International Services lost 2.5 percent.
Abu Dhabi’s index dropped 0.5 percent, weighed down by the banking sector; the largest lender, First Abu Dhabi Bank , was down 1.0 percent.
The Dubai index was flat as 15 shares rose and the same number declined. (Reporting by Celine Aswad; Editing by Andrew Torchia)