RIYADH: Gulf stock markets came off early highs to close mixed on Sunday, while Egypt continued to rebound but low trading turnover cast doubt on whether any extended recovery was beginning.
Buying of beaten-down blue chips boosted the Saudi Tadawul All-Share Index as much as 0.8 percent in early trade, but it ended 0.3 percent lower at 9,253 points.
Miner Maaden finished up 0.9 percent but petrochemical producer Saudi Basic Industries Corp., which had surged its 10 percent daily limit on Thursday in response to a rebound of oil prices, lost steam and ended 1.1 percent lower.
Zain Saudi fell 2.1 percent after the company said it had received an order from Saudi Arabia’s Department of Zakat and Income Tax for extra payments worth SR619 million ($165 million) for the years 2009-2011. It said it would appeal the order.
“Relatively weak oil prices have finally begun to weigh on the Saudi economy,” Saudi Arabia’s Samba Financial Group said in a report.
“…Activity is showing signs of slowing as the government begins to dial back spending: Imports have fallen as private contractors retrench. Bank lending growth has also slowed, and the growth in May retail sales dipped to its lowest rate since October 2013.”
Samba said it expected government spending on wages, subsidies and other benefits to remain firm, but investment was likely to be scaled back, affecting the construction and manufacturing sectors.
The Saudi market’s pull-back deepened after a senior Iranian official told Reuters an agreement in negotiations with world powers on Tehran’s disputed nuclear program was close, though another later said a deal would not come on Sunday.
By removing the sanctions on Iran’s economy, a nuclear deal would be seen as positive for Dubai, which would serve as a staging point for foreign trade with and investment in Iran.
But it could be modestly negative for many other Gulf markets, because an increase in Iranian oil sales might push down global crude prices.
Dubai’s index rose as much as 1.1 percent in early trade but closed 0.1 percent lower at 4,015 points. Construction firm Drake & Scull, the most heavily traded stock, initially surged but ended down 0.5 percent.
Drake has been volatile since it announced on July 2 that it was removing a ceiling for investment by Gulf Cooperation Council (GCC) nationals in its shares. Since then there does not appear to have been a jump in overall GCC ownership — the latest exchange data shows it at just under 55 percent, against 57 percent when the announcement was made.
The Abu Dhabi index rose 0.5 percent to 4,731 points as Abu Dhabi National Energy Co. jumped 7.5 percent in its heaviest trade since mid-May. Reuters quoted sources as saying at the start of July that the Abu Dhabi government might merge the firm with other institutions to strengthen its finances; the company said it was not in any talks.
Qatar edged up 0.1 percent as Barwa Real Estate, the most active stock, and petrochemical producer Industries Qatar each added 0.4 percent, though they came well off their highs.
Egypt’s index rose 1.0 percent. On Thursday it had gained 0.9 percent, breaking a six-day losing streak and bouncing from a 15-month low that was down 25 percent from February’s multi-year peak.
Real estate developer Emaar Misr — whose poor performance since it listed a week ago after an initial public offer at 3.80 Egyptian pounds per share was one reason for the market’s gloom — finally rose on Sunday, gaining 2.1 percent to 3.36 pounds.
