Saudi petchems down as first quarterly results weigh on soft market

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Gulf stock markets mostly slipped on Sunday, following a series of disappointing corporate results in Saudi Arabia and a slide in global stocks.

The Saudi index <.TASI> lost 1.3 percent, with the whole petrochemicals sector in negative territory, despite a rise in oil prices late last week.

Advanced Petrochemical <2330.SE> dropped 2.8 percent after reporting a slight decline in quarterly net income to 202 million riyals ($53.86 million). This was above analysts’ median forecast of 188 million riyals, according to Refinitiv data.

The company said the drop in net profit was due to an increase in feedstock costs. In a research note NCB Capital said it maintained its overweight rating on the company, adding that “high and sustainable operating efficiency and attractive dividend yield of 5.2 percent are the stock’s key strengths.”

Saudi Kayan Petrochemical Co. <2350.SE> was among the worst performers, dropping 4.4 percent.

Blue-chip Saudi Basic Industries Corporation <2010.SE> lost 1.6 percent.

Shares in Almarai <2280.SE>, the Gulf’s largest dairy company, dropped 2.6 percent after posting 634.5 million riyals ($169.19 million) in third-quarter net profits against 667 million riyals during the same period last year.

Analysts had a median forecast of 654 million riyals, according to Refinitiv data.

Dubai was underpinned by a 2.9 percent gain by contractor Drake and Scull International <DSI.DU>. But the index as a whole <.DFMGI> edged down almost 0.1 percent.

DSI, which has faced increasing losses since 2015, said on Sunday the majority of shareholders approved the company continuing its business at a general assembly on Thursday.

The meeting was called in accordance with UAE companies’ law, which states that shareholders must decide whether to dissolve a company if its losses amount to half of its issued share capital.

In Abu Dhabi the index <.ADI> shed 0.3 percent, pulled down the day’s most active stock, Dana Gas <DANA.AD>, which lost 1.7 percent.

DUBAI (Reuters)

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