Saudi stocks open in the red after ratings cuts

Saudi Arabia’s Tadawul All Share Index (TASI) fell 0.14 percent on Tuesday within the first 20 minutes of trade. Most sectors were down after Standard and Poor’s Ratings Services downgraded several Saudi blue chips on Monday night.

S&P cut ratings of Saudi Telecom (STC), Samba Financial Group, Riyad Bank, Al Rajhi Bank, Arab National Bank, SABIC, National Commercial Bank, and Saudi Electricity (SEC).

As for company news, Utility provider SEC said it will borrow up to $1 billion to go towards the construction of a SAR 12.2 billion power plant in Shuqaiq. SEC’s board of directors also recommended paying a cash dividend for FY15 at SAR 0.7 a share, or 7 percent of capital.

Eastern Province Cement Co.  plans to halt production at furnace no. 1 until market conditions improve and export bans in Saudi Arabia are lifted. The cement maker has recommended paying a cash dividend for FY15 at 25 percent of capital, or SAR 2.5 a share.

Petrochem said it will shut down its polymers unit for a 60-day scheduled maintenance during Q4-2016. It said it won't pay dividends for FY15 in order to capitalize on liquidity to finance projects.

Methanol Chemicals (Chemanol) received a note from Saudi Aramco on revised methane prices at USD1.25/mmBtu up from USD0.75/mmBtu. It expects cost of production to rise by 3 percent instead of the previously mentioned 5 percent.

Herfy Food Services board of directors recommended paying cash dividend at SAR 1.5 a share for H2-2015.

Saudi Industrial Export Co​.​​ ​(SIEC) said Afia international Co.’s cancellation of a distribution contract with Shahd Al Sahara ​Trading will result in a negative impact of SAR 1.3 million.

Brent on Tuesday was last trading at $34.06/bbl. WTI was last down 1.95 percent to $32.48/bbl, albeit higher after hitting the $29-mark last week. The International Energy Agency (IEA) said it expects the global oil market to start rebalancing in 2017.