Persian Gulf shares declined on forecasts that Saudi Basic Industries Corp.'s profit will drop, stoking concern that corporate earnings in the region may be lower than expected, dpa reported.
Saudi Basic, the region's biggest publicly traded company known as Sabic, dropped for a fourth day. Savola Al Azizia United Co., Saudi Arabia's biggest food producer, fell to the lowest intra-day level in almost two months. Emaar Properties PJSC also retreated.
Saudi Arabia's Tadawul index declined 1.4 percent to 4,636.04 at 11:36 a.m. local time, bringing the five-day slump to 10 percent. The Dubai Financial Market General Index dropped 4.8 percent and the Abu Dhabi Securities Exchange General Index retreated 3 percent. Qatar's Doha Securities Market Index fell 3.3 percent.
"The consensus on Sabic's numbers is a possible indication of weaker-than-expected fourth-quarter earnings across the region, which is why the markets are under pressure," Mohammed Galal, head of foreign institutional sales at Al Futtaim HC Securities, said in a phone interview today. "The local sentiment is negative, there is a lack of foreign investment, oil prices are falling and the global markets are weak," he added.
Sabic, the world's largest petrochemicals maker, fell 4.9 percent to 44.8 riyals, bringing the four-day drop to 20 percent.
The company may report its steepest decline in quarterly profit since 2002 after the global financial crisis and a slumping auto industry reduced demand for plastics and chemicals, according to the average estimate of four analysts surveyed by Bloomberg. Fourth-quarter net income probably fell 31 percent to 4.74 billion riyals ($1.1 billion), according to the survey.
