DUBAI: Saudi Arabia’s Mobily tumbled for a second day. The investors dumped the stock when the telecommunications firms revised 18 months of prior profits. They announced a profit drop of third-quarter. Mobily’s shares fell 9.7 percent to 65 riyals ($17.32). 18.5 percent losses have been recorded after two days since resuming trade.
As of 0805 GMT, about 125,000 Mobily shares had been sold while sell orders totalling more than 23 million shares remained unfulfilled.
On Monday, Mobily cut its profits for 2013 and the first half of 2014 by a combined 1.43 billion riyals ($381.2 million), citing accounting errors, and also reported a 71 percent drop in third-quarter profit. Mobily’s actions prompted the bourse regulator to launch a probe.
“Mobily was well traded by both institutions and retail investors,” said Sanyalaksna Manibhandu, manager of research at NBAD Securities.
“At some point everything will be resolved, but in the short term I think the stock will be avoided. Those people who might say ‘the stock has gone down quite a bit let’s get back in’ will wait until there’s more clarity.” Saudi Arabia’s index was down 1.3 percent at 9,659 points at 0806 GMT, slumping to a new two-week intraday low as weak oil prices further soured sentiment.
“Some people are in panic mode and when panic sets in you tend to see some good valuations, but given that oil prices have gone down so steeply it will be a brave person who says ‘let’s go in big’,” said Manibhandu.
“For as long as oil prices are weak, the risk is to the downside – in the short term, crude prices will be an indicator of what will happen in equity markets.” Brent crude dropped towards $82 a barrel on Wednesday, stretching losses into a fifth session.
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