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Saudi Shares Fall Most in 2 Months as Sabic Profit Disappoints

Jan. 19 (Bloomberg) -- Saudi Arabian shares retreated the most in two months after fourth-quarter earnings at Saudi Basic Industries Corp. missed analysts’ expectations. Qatar’s stock index fell the most since November.

Saudi Basic, the world’s biggest petrochemicals maker, dropped the most in six months. Saudi Arabian Mining Co. decreased for a fourth day after it posted a fourth-quarter loss. The Tadawul All Share Index declined 0.9 percent, the most since Nov. 23, to 6,657.73 at the 3:30 p.m. close in Riyadh. The measure has slipped 0.9 percent this week, snapping a seven-week rally. Qatar’s QE Index retreated 1.3 percent, also the most since Nov. 23.

“There’s a little disappointment that Sabic’s numbers missed estimates,” said Haissam Arabi, chief executive officer of Gulfmena Alternative Investments in Dubai.

Sabic’s profit advanced 27 percent to 5.81 billion riyals ($1.55 billion) from 4.58 billion riyals a year earlier. The median of five analysts’ estimates was for a profit of 6.14 billion riyals, while the mean estimate was 5.88 billion riyals, according to data compiled by Bloomberg. The shares fell 3.2 percent, the most since July 20, to 107.25 riyals. They have gained 20 percent in the past 12 months.

The decline in Saudi shares “is a short-lived over-reaction to Sabic earnings considering the petrochemical cycle. The results triggered some profit-taking after a recent rally in the Saudi market,” Gulfmena’s Arabi said. The Tadawul has risen 5.4 percent since the end of November.

Oil Prices

Credit Suisse Group AG, EFG-Hermes Holding SAE and Morgan Stanley recommended the kingdom’s shares in reports this month, citing stronger oil prices. Crude climbed as much as 0.8 percent to $92.09 a barrel in electronic trading on the New York Mercantile Exchange today.

Saudi Arabian Mining retreated as much as 3.6 percent, the most since June 29, to 22.5 riyals before closing at 23.15 riyals. The state-run producer known as Maaden posted a loss of 64.5 million riyals after a profit of 333.8 million riyals in the year-ago period.

Saudi Arabian Amiantit Co. slumped as much as 10 percent to 18.5 riyals after the maker of fiberglass said fourth-quarter profit dropped 35 percent. The shares closed at 20 riyals.

Dubai’s DFM General Index and Oman’s MSM 30 Index fell 0.2 percent, while Kuwait’s SE Price Index was little changed. Bahrain’s gauge dropped less than 0.1 percent. Abu Dhabi’s ADX General Index slipped 0.1 percent.

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

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

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