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Monday, 20 September 2021

Gulf may be dampened by oil, aftermath of earnings

Reuters , Sunday 31 Jul 2016
Dubai Financial Market
An investor looks up at screens displaying stock information at the Dubai Financial Market (File Photo: Reuters)

Stock markets in the Gulf may be weighed down by soft oil prices and the aftermath of a mediocre corporate earnings season on Sunday, while Egypt's index may be boosted slightly as its currency strengthens on the black market.

The September Brent oil contract settled at $42.46 a barrel on Friday, down 0.6 percent on the day and 14.5 percent lower on the month. It was the biggest monthly drop for Brent since December.

Earnings season is now over in Saudi Arabia and mostly finished in the rest of the Gulf. In general, earnings were mediocre and in line with analysts' expectations. Many Saudi petrochemical companies beat expectations because of higher operating margins, but retail and consumer-focused firms were sluggish, a sign of weak economic growth.

In Dubai, du reported an 11.3 percent fall in second-quarter net profit of 445.4 million dirhams ($121.3 million), at the low end of expectations; analysts at EFG Hermes and SICO Bahrain had forecast 433.8 million dirhams and 487.1 million dirhams respectively.

Egypt's market <.EGX30> may be firm after the Egyptian pound strengthened on the black market on Thursday to between 12.30 12.70 to the dollar, from 13 per dollar a week ago. This suggests outflows of hard currency may have eased. Also, Egypt's central bank kept its key interest rates unchanged on Thursday.

On Tuesday Cairo announced it was in the final stages of negotiations with the International Monetary Fund for a three-year loan package; the main index is up 6.8 percent since that date.

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