MIDEAST STOCKS-Gulf weakens in early trade; Saudi’s Savola slumps – Reuters

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DUBAI, April 20 Stock markets in the Gulf edged
down in early trade on Wednesday with Saudi Arabia’s blue-chip
food and telecommunications shares selling off after posting
mixed earnings.

Riyadh’s main index was down 0.1 percent in the
first hour of trade.

Savola Group slumped 7.8 percent to 38.80 riyals
after the largest food company in the Gulf reported an 80.3
percent drop in first-quarter net profit, missing analysts’

The board approved a cash distribution of 0.25 riyal per
share for the first quarter, lower than 0.5 riyal in the same
period last year, according to Reuters data. The food and
agriculture sub-index fell 3.1 percent.

The telecommunications sub-index dropped 1.9
percent after the top two companies reported earnings late on
Tuesday. Etihad Etisalat (Mobily) dropped 5.6 percent
despite swinging to a first-quarter profit of 16.6 million
riyals ($4.43 million) compared to a loss of 44.5 million riyals
in the prior-year first quarter.

Analysts at NCB Capital had forecast it would make a net
profit of 201.1 million riyals for the period, but EFG Hermes
had expected a net loss of 4.59 million riyals.

“Mobily, which stopped distributing dividends in the third
quarter of 2014, has not yet announced plans to increase
shareholder value through cash outlays, and this could have
disappointed investors,” said a Jeddah-based equity analyst.

Saudi Telecom was down 0.4 percent after the
company missed analysts’ forecasts. Net profit for the first
quarter dropped 5.2 percent because of rising costs; the firm
made a profit of 2.38 billion riyals compared to analysts’
average expectation of 2.5 billion riyals.

But petrochemical shares outperformed with bellwether Saudi
Basic Industries, which reported better-than-expected
earnings on Monday, adding 0.6 percent.

In the United Arab Emirates the two main indexes were down.
Abu Dhabi fell 0.6 percent as Abu Dhabi Islamic Bank
slumped 6.5 percent. It had surged 9.5 percent on
Tuesday after Bloomberg reported ADIB planned to open its shares
to foreign ownership, but after the market close, the bank
issued a statement saying it had no such plan.

Other large-cap banks were also sold with Abu Dhabi
Commercial Bank, which has yet to report earnings,
falling 1.3 percent.

Dubai’s stock index shed 0.3 percent, weighed down
by a 1.2 percent drop in Emirates NBD. On Tuesday
Dubai’s largest lender said it had laid off around 300 people in
recent weeks at two subsidiaries as it seeks to cope with a
weaker economy. ENBD reported a first-quarter net profit of 1.81
billion dirhams ($492.8 million),up 8 percent from the same
period a year earlier.

But builder Arabtec was up 2.3 percent ahead of
its shareholder meeting later in the afternoon.

(Reporting by Celine Aswad; Editing by Andrew Torchia and Toby

MIDEAST STOCKS-Gulf weakens in early trade; Saudi’s Savola slumps – Reuters}