Volumes retreated further on Saudi Arabia’s stock exchange on Wednesday and the benchmark index slipped lower as investors looked ahead to the second quarter corporate earnings for direction.
The Tadawul All Share Index (TASI) closed 0.5 percent lower at 7,266. Total trading turnover was SAR 2.7 billion. The market breadth was however skewed as 91 stocks advanced compared to 75 decliners indicating heavy selling in select names.
Many blue chips extended losses from the previous session. SABIC fell slightly to SAR 101.60 while Maaden was nearly 2 percent lower at SAR 50.30.
Analysts expect petrochemicals to post lower net profit in the second quarter on lower product prices and shutdowns across the sector.
Bank stocks mostly declined. Shariah heavyweight Al Rajhi Bank was down more than 1 percent to SAR 65.50. National Commercial Bank, Saudi British Bank, Arab National Bank and Riyad Bank all fell between one and two percent.
F&B heavyweights Savola and Almarai proved to be the main drags on the sector index. Savola dropped 5 percent to SAR 44.10 and Almarai fell 3 percent to SAR 85.80.
Aljazira Capital has revised their recommendation to ‘Underweight’ on Almarai due to its unjustified market price and set a price target of SAR 73.50 per share indicating a potential downside of 21.7 percent.
Meanwhile, United Electronics Co. (eXtra), which saw trades worth SAR 34 million, closed 4 percent higher at SAR 34.30, paring some early gains. Within one hour of opening today the stock had climbed 6 percent to hit a 52-week high of SAR 35.40.
Write to Brinda Darasha at brinda.d@argaamplus.com
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