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Saudi Arabia Shares Fall on Concern Gains Overdone, Earnings

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July 12 (Bloomberg) -- Saudi Arabia shares retreated for the first time in three days on concern recent gains are overdone given growth prospects in the region and as companies posted declines in second-quarter earnings.

The Tadawul All Share Index lost 0.4 percent, the most since July 7, to 6,216.7. The gauge has advanced 2 percent this month. Saudi British Bank slid after reporting a 34 percent drop in second-quarter profit and Saudi Industrial Exports Co., the company that exports and imports products including fertilizers and chemicals, decreased 2.7 percent. The Bloomberg GCC 200 Index was little changed at 53.47.

“We’re seeing a bit of a pullback” on a lack of positive local catalysts, said Haissam Arabi, chief executive officer of Gulfmena Alternative Investments in Dubai. Gulf shares are “still reacting to the direction of global markets.”

Crude for August delivery dropped as much as 81 cents, or 1.1 percent, to $75.28 a barrel in electronic trading on the New York Mercantile Exchange. Saudi Arabia holds a fifth of the world’s proven oil reserves.

The MSCI Asia Pacific Index declined 0.1 percent as Japan’s ruling party lost its parliamentary majority, increasing political uncertainty. Futures on the Standard & Poor’s 500 Index retreated as much as 0.7 percent as investors awaited the start of the second-quarter earnings season.

Kuwait

Saudi British lost 1.6 percent, the most since July 3, to 43 riyals. The bank 40 percent owned by HSBC Holdings Plc said net income fell to 447 million riyals ($119.2 million) from 676 million riyals year earlier. Saudi Industrial retreated to 25.4 riyals, the lowest since June 22. The company said its second-quarter loss widened to 2.9 million riyals from 395,000 riyals a year earlier.

The Kuwait SE Price Index rose 1 percent to 6,496.5, the highest this month. “The gain in Kuwait can be explained by reports that the government will inject liquidity into the market if needed,” Arabi said.

Kuwait’s government is willing to shore up the bourse through investments by the country’s sovereign fund, Al-Watan newspaper reported today, citing Commerce and Industry Minister Ahmed al-Haroun. The newspaper did not give further details on the envisaged intervention by the Kuwait Investment Authority.

The DFM General Index lost 0.2 percent, Oman’s MSM 30 Index fell 0.6 percent and Abu Dhabi’s gauge was little changed at 2,527.33. The QE Index in Qatar increased 0.3 percent and Bahrain’s gauge rose 1.5 percent, the most in three months.

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net or

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net.

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