Major bourses in the Gulf fell in early trade on Monday, with banking shares weighing on the Saudi index a day after it advanced after two lenders in the sector said they signed an initial merger agreement.
The benchmark index of Saudi Arabia, which has reported the highest number of new coronavirus infections in the six countries of the Gulf Cooperation Council (GCC), slipped 0.3%.
National Commercial Bank (NCB), which closed up 5% in the last session, declined 3.2% and Riyad Bank was down 2.2%.
NCB, the kingdom's biggest lender, said on Thursday it had signed an initial agreement with smaller lender Samba Financial Group to create a combined entity with almost $214 billion in assets.
But Samba jumped 6.1% to 27.9 riyals in early trade following a nearly 10% surge in the previous session.
The offer would value each Samba share at 27.42 to 29.32 riyals ($7.82), giving it a maximum market value of $15.63 billion, 27.5% above its market value of nearly $12.3 billion based on Wednesday's closing price.
The two banks intend to conclude a reciprocal due diligence process and sign definitive agreements in relation to the proposed transaction within four months.
In Dubai, the index edged down 0.1%, with sharia-compliant lender Dubai Islamic Bank losing 0.5%, and logistic firm Aramex falling 1.1%.
The Abu Dhabi index eased 0.5, pulled down by a 1.3% fall in the country's largest lender First Abu Dhabi Bank and a 4.2% slide in Gulf Pharmaceutical Industries.
Qatar's index dropped 0.6%, with most of its constituents trading lower. Petrochemical firm Industries Qatar led the losers with a drop of 1.9%. ($1 = 3.7510 riyals)
(Reporting by Ateeq Shariff in Bengaluru Editing by Mark Heinrich) ((AteeqUr.Shariff@thomsonreuters.com; +918061822788;))