Samba Financial Group made its largest drop in seven months after its
quarterly profit missed estimates, while other Saudi banks also fell as initial
relief over lower provisions gave way to fears for balance sheet growth.
Samba dropped 3.2 percent, its biggest decline since June 5. The lender
reported a 7.9 percent rise in quarterly profit to SR901m, but fell shy of the
average analyst forecast of SR1.04bn.
“Some disappointment in bank numbers has put some pressure on the
market today,” says Walid Shihabi, Shuaa Securities chief executive.
“Banking continues to weigh on the Saudi market. Balance sheet
expansion has not come through and in the case of Samba there has been balance
sheet contraction.
“Key revenue drivers continue to show negative signs. Lower provisions
are the primary drivers of beat on the bottom line, but people are more
concerned about a return to balance sheet growth.”
SABB fell 0.5 percent and Al Rajhi Bank dropped 1.5 percent.
Saudi Arabia’s index TASI slipped 0.3 percent to 6,768 points, its first
decline in five sessions.
Abu Dhabi’s Aldar Properties slumped to a new five-month low, extending
declines since unveiling a restructuring plan that is seen as dilutive to
minority shareholders.
Aldar fell 3.8 percent to its lowest close since mid-August.
Banks also struggled. Abu Dhabi Commercial Bank and First Gulf Bank dropped
1.9 and 2 percent respectively.
Abu Dhabi’s index ADI fell 0.9 percent to 2,690 points, its lowest finish
since October 7.
Dubai’s benchmark DFM climbed 0.5 percent to 1,609 points, rebounding
slightly from Sunday’s 19-week low.
Qatar’s index QSI made its largest decline this year, easing from Sunday’s
27-month peak.
Industries Qatar and Barwa Real Estate each dropped 1.8 percent, while Qatar
Islamic Bank fell 1.6 percent.
The index fell 0.9 percent to 9,164 points, its largest dropped since December
28.
“Today’s drop is nothing serious, it’s just some profit taking
following recent gains and buyers will come back in,” said Thamer
Gadallah, head of investments at Almana Group.
“Everyone is bullish about banks and I think the focus will be on them
in the first quarter.”
This confidence stems from a multibillion dollar state spending plan ahead
of the 2022 soccer World Cup, Gadallah says, plus last week’s move by the
government to buy a remaining 10 percent stake of a promised 20 percent stake
in local lenders.
Kuwait’s benchmark KWSE declined for a fourth straight session, slipping 0.1
percent to 6,915 points.
Zain fell 1.4 percent, equalling Thursday’s month low. After market hours on
Sunday, the telecoms operator said its management was not informed about an
offer from Turkey’s Cukurova Holding to acquire a 29.9 percent stake.
Abu Dhabi’s Etisalat is bidding to buy a 46 percent stake in Zain.
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