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Saudi index sees biggest fall since May

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(Reuters) – Saudi Arabian shares fell sharply on Sunday in a broad sell-off, while a plunge in Commercial International Bank weighed on the Egyptian index.

FILE PHOTO: Saudi traders monitor stock information at the Saudi stock market in Riyadh, Saudi Arabia August 25, 2020. REUTERS/Ahmed Yosri

The kingdom’s benchmark index slid 4.1%, its biggest intraday fall since May, with Saudi Basic Industries Corp (SABIC) shedding 4.5% and oil giant Saudi Aramco losing 2.3%.

SABIC, the Gulf’s largest petrochemical firm, reported a net profit of 1.09 billion riyals ($290.64 million) in the third-quarter, up from 0.74 billion riyals a year ago. However, the firm reported a drop in quarterly sales.

“It is about time that the Saudi market weakened. The market trades at unsustainably high multiples (low 20s forward multiple) and earnings growth of less than 10%, does not warrant that high valuation,” said Khaled Abdel Majeed, fund manager at Mena Capital.

In recent days a Saudi-led military coalition fighting the Houthi group in Yemen has said it had intercepted and destroyed three explosive-laden drones aimed towards the southern region of Saudi Arabia.

Outside the Gulf, Egypt’s blue-chip index declined 3.5%, weighed down by a 6.9% fall in Commercial International Bank (CIB).

Shares in CIB plunged 10% at Sunday’s opening, following the resignation on Friday of CIB chairman Hisham Ezz al-Arab.

Dubai’s main share index lost 0.4%, dragged down by a 3.4% fall in Emaar Malls and a 0.8% decline in blue-chip developer Emaar Properties.

The Abu Dhabi index rose 0.3%, helped by a 3.2% jump in Abu Dhabi Commercial Bank and a 0.5% increase in the country’s largest lender First Abu Dhabi Bank.

In Qatar, the index retreated 1.5%, as most of the stocks on the index were in negative territory including Mesaieed Petrochemical, which was down 7.1%.

Reporting by Ateeq Shariff in Bengaluru; Editing by Raissa Kasolowsky

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