20 August 2015
JEDDAH -- Saudi Arabia stocks were lower after the close on Wednesday, as losses in the Real Estate Development, Transport and Industrial Investment sectors led shares lower.
The stock benchmark Tadawul All Share Index fell 2.51% to hit a new 6-months low at 7,991.28 points.
The best performers of the session on the Tadawul were Saudia Dairy and Foodstuff Co, which rose 1.08% or 1.52 points to trade at 142.25 at the close. Meanwhile, Aldrees Petroleum & Transport Svcs added 0.89% or 0.51 points to end at 57.50 and The Saudi British Bank was up 0.85% or 0.27 points to 31.90 in late trade.
The worst performers of the session were Takween Advanced Industries, which fell 10.00% or 4.80 points to trade at 43.20 at the close. Anaam International Holding Group declined 10.00% or 2.50 points to end at 22.50 and Electrical Industries Co was down 9.95% or 4.22 points to 38.20.
Falling stocks outnumbered advancing ones on the Saudi Arabia Stock Exchange by 156 to 10.
Saudi Arabia's stock index was down 0.3 percent after its first hour of trade, having tumbled 10 percent earlier this month.
Many stocks rebounded and petrochemicals giant Saudi Basic Industries rose 1.2 percent. Thursday will be the last trading day when buyers of the stock are eligible for a dividend which is now worth more than 6 percent of the share price.
But analysts remain cautious about the market.
"Oil is currently trading 8 percent off its low while Dubai and Saudi are 27 percent and 14 percent off their respective lows during the same period. In other words, there is room for further downside," Adel Merheb, director of equity capital markets at Dubai's Shuaa Capital, said in a note.
Meanwhile, Egypt's stock index dropped 2.1 percent to 7,241 points after falling below chart support at its July low of 7,527 points in the previous session.
Nearly all stocks were down and carpet maker Oriental Weavers tumbled 4.5 percent after the state competition watchdog accused it of "monopolistic practices" and referred it to the public prosecutor.
The company, which has denied the accusations, could be fined up to 300 million Egyptian pounds ($38 million) if a court rules against it.
Shares in Anaam International Holding Group fell to 5-year lows; losing 10.00% or 2.50 to 22.50. Shares in Electrical Industries Co fell to all time lows; losing 9.95% or 4.22 to 38.20.
Global oil prices stabilized on Wednesday as investors awaited a US inventory report to gauge demand in the world's top economy.
US benchmark West Texas Intermediate for September delivery was down 18 cents at $42.44 a barrel compared with Tuesday's close.
WTI has lost more than 30 percent of its value in the past two months, and on Friday it tumbled to $41.35 - a level last witnessed in March 2009.
Nearing midday in London on Wednesday, Brent North Sea crude for October delivery was up five cents at $48.86 per barrel.
Analysts said prices were unlikely to stage a sustained rally because the market remains awash with supplies from the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia.
Later on Wednesday, the US government's Department of Energy (DoE) will publish its latest report on American crude inventories for the week ending August 14.
The weekly update is a crucial barometer of crude demand in the world's biggest economy - which is also a large producer of shale oil.
Analysts expect inventories to decline, but also said stockpile levels remain high after a weaker-than-hoped rise in demand during the summer.
"Output in the US has turned out to be more robust than many had previously assumed, as shale firms have dramatically slashed costs and increased their efficiency rather than cutting production," said Thomas Pugh, commodities economist at research firm Capital Economics.
Demand growth is not keeping pace with supply, especially with the slowdown in China, the world's top energy-consuming nation and its second-biggest economy.
Iran last month also reached an agreement with major world powers to rein in its nuclear ambitions in exchange for the lifting of crippling Western economic sanctions, which have restricted its oil exports.
"This renewed decline in oil prices has largely been driven by a combination of concerns about demand, notably from China, and continued strong growth in supply," Pugh said.
"OPEC has increased its output by almost 1.4 million barrels per day since January and the potential return of exports from Iran early next year could exacerbate the supply glut," he said.
© The Saudi Gazette 2015