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Jan 18 2012

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MIDEAST MORNING BRIEFING: Sabic 4Q Blues Seen Weighing On Gulf Mkts

Saudi SE               6370.16              -0.79% 
Dubai FM               1310.40              +0.70% 
Abu Dhabi SM           2293.09              -1.35% 
Kuwait SE              5789.40              +0.46% 
Doha SM                8600.28              -0.46% 
Muscat SM              5602.38              -0.56% 
Bahrain SE             1138.40              -0.33% 
Cairo SE               3877.29              +1.17% 
Amman                  1935.93              -0.29% 

ICE Brent $/bbl         111.91              +0.30% 
Gold $/troy oz         1651.30              -1.01% 
Euro-USD                  1.28              +0.24% 
DJIA                  12482.07              +0.48% 

 

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--A less than rosy fourth-quarter earnings report from the Middle East's largest listed company, on top of protracted concerns about Europe's sovereign debt crisis, will likely keep a cap on Gulf stock markets Wednesday.

Saudi Basic Industries Corp., or Sabic , late Tuesday said its fourth-quarter net profit fell 10% to 5.24 billion Saudi riyals ($1.43 billion), well short of some analyst expectations, due to a lower global pricing environment. The Saudi bellwether's profits were particularly affected by slower growth in China and the debt crisis in Europe, which "is impacting our business already...it is not a good situation and everybody is in the same boat," Chief Executive Mohammed Al Mady told a press conference.

Traders said investors still remain reluctant to take significant positions on the region's stock markets as further debt auctions loom large this week in Europe and tense talks between Greece and its private creditors over a 50% haircut, an integral part of a EUR130 billion second bailout loan for Greece, continue.

February Nymex crude oil futures were 34 cents higher at $101.05 a barrel on Globex.

U.A.E.: Dubai's market closed +0.7% at 1310.40 Tuesday; after plumbing a multi-year low in the previous session.

DFM shares rose 4.3% to AED0.707 Tuesday, rebounding after falling almost 10% in the previous session.

Abu Dhabi's market was down 1.4% at 2293.09; heavyweight Etisalat ended -4.2% at AED8.80.

Dana Gas shares closed flat at AED0.34 Tuesday, after falling more than 8% in the previous session. The stock had lost about 24% in January to Monday's close amid speculation about the oil and gas company's financial situation, including receivables from Egypt, where the company produces the bulk of its oil and gas output.

Dana Gas said Tuesday it would continue to meet its debt obligations as it moved to squash market speculation about its ability to refinance a $1 billion convertible Islamic bond due in October this year.

SAUDI ARABIA: The Tadawul market ended -0.8% at 6370.16 Tuesday; petchem stocks dragged. Saudi Kayan fell 6.7% to SAR15.95 Tuesday after its fourth-quarter loss widened year on year.

"A few petchems reported disappointing figures and that pressured the market from the open," said one trader. He added that earnings will remain the key focus for local investors heading into the Saudi weekend.

Al Rajhi Bank , the Arab Gulf region's biggest lender by market value, said after the bell Tuesday that its fourth-quarter net profit advanced 14% on year to 1.90 billion Saudi riyals ($506 million), largely in line with expectations. Its shares closed down 1.4% at SAR71.50.

Riyad Bank (1010.SA), the third-largest lender in Saudi Arabia by market capitalization, meanwhile posted net profit of SAR778 million ($207 million) for the fourth quarter, up 1.8% on the year. Its share price fell 0.4% to SAR23.20.

Elsewhere, Saudi Arabian Mining Co., also known as Maaden, reported an SAR280 million ($74.6 million) profit for the fourth quarter. The mining company credited the launch of its commercial production of ammonia, higher ammonia and gold prices, as well as lower Islamic zakat tax provisions for the turnaround from a net loss of SAR61 million in the same quarter in 2010.

Saudi Arabia's largest food company, Savola Group, said Tuesday its fourth-quarter net profit jumped to 498.6 million Saudi riyals ($132 million) from SAR2 million in the same period a year ago, partly due to a turnaround in profitability of its food sector overseas. Savola shares closed 0.4% higher at SAR28.50 prior to its results being released.

KUWAIT: The market closed +0.5% at 5789.40 Tuesday, propped up by financial stocks.

QATAR: Doha's market ended down 0.5% at 8600.28 Tuesday; bank stocks led the decline.

Ezdan Real Estate Co., Qatar's largest real-estate firm by market value, said Tuesday it is selling QAR1.53 billion of property to Al Tadawal Holding Group.

Qatar National Bank said Tuesday it has signed an agreement to take a majority stake in Morocco-based Union Marocaine des Banques, or UMB, as the Gulf state's largest lender by market value expands its overseas presence. Its shares closed trading Tuesday 0.2% lower at QAR146.80.

BAHRAIN: The main gauge of stocks closed down 0.3% at 1138.40 Tuesday; banks dragged.

OMAN: The market ended down 0.6% at 5602.38 Tuesday; service sector stocks were among the top losers.

EGYPT: The market closed 1.2% higher at 3877.29 Tuesday.

Egypt's request for a $3.2 billion loan from the International Monetary Fund is encouraging, although IMF assistance on this scale would only have a meaningful impact on the country's finances if it triggered additional international support, Fitch Ratings said Tuesday.

Egypt's government started negotiations with the IMF on Monday for a $3.2 billion loan that Egypt's interim government had initially rejected last June.

NEWS FROM AROUND THE GULF: Masdar, a unit of Abu Dhabi's Mubadala Development Co., expects to soon pick a partner to help build a 100-megawatt photovoltaic power plant in the emirate, a senior company executive said Tuesday.

Abu Dhabi-based investment fund Aabar Investments said Tuesday in an emailed press release that it intends to increase its stake in UniCredit SpA to 6.5% as it has entered talks to buy more rights.

Abu Dhabi-owned Etihad Airways said Tuesday it has reduced firm orders for Airbus A350-1000 jetliners, but is retaining options to buy more of the aircraft. Etihad was confirming an earlier report it had cut its firm orders to 19 aircraft from 25.

Iran has warned Saudi Arabia against delivering additional oil to world markets to compensate for a drop in Iranian oil exports if they are hit by sanctions, as the U.S. continued to have mixed success in convincing Tehran's major customers to reduce their purchases of Iranian oil.

-By Tim Falconer, Dow Jones Newswires; +9714 446-1690; tim.falconer@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

18-01-12 0533GMT