Arab Stocks Fall Most in 2 Months on Oil’s Drop, Sabic Results

By Ayesha Daya and Michael Patterson

Jan. 20 (Bloomberg) -- Arab Stocks dropped the most in two months after crude oil fell below $33 a barrel and Saudi Basic Industries Corp. posted a record slump in earnings.

Sabic tumbled 9.8 percent after the world’s largest chemical maker by market value said fourth-quarter net income fell 95 percent, a steeper decline than analysts estimated. Abu Dhabi National Energy Co., the state-controlled energy investor known as Taqa, lost 5.1 percent as oil dropped and the company said it will invest less money than previously planned. Saudi British Bank and Al-Rajhi Bank slid on lower profit.

“Sabic’s miss is quite significant and the market will be trying to determine why it is so large,” said Ali Khan, head of cash equity trading at Dubai-based Arqaam Capital Ltd.

Arab stocks tumbled since July, led by banks and property developers, as oil’s retreat from a record $147.27 a barrel eroded government surpluses amid a real-estate slump and credit- market freeze. HSBC Holdings Plc predicts the economies of oil exporting Gulf states will contract if crude prices decline to $25 a barrel.

The Bloomberg GCC 200 Index of the Gulf region’s shares dropped 4.3 percent to 42.55 at 6:25 p.m. in Dubai, the steepest retreat since Nov. 11 and the lowest level since pricing began in December 2005. Egyptian stocks fell for a 10th straight day, sending the CASE 30 Index down 4.7 percent, its steepest decline since Nov. 24.

Sabic Retreats

Saudi Arabia’s Tadawul All Share index slid 2.4 percent, while the Dubai Financial Market General Index dropped 3.7 percent. Oman’s Muscat Securities Market Index tumbled 6.3 percent and Qatar’s DSM 20 Index lost 6.2 percent for the steepest declines among 89 equity indexes tracked by Bloomberg globally.

Sabic lost 9.8 percent to 40.5 riyals, the lowest level since March 2004. Net income dropped to 311 million riyals ($82.9 million) from 6.87 billion riyals a year earlier, the Riyadh-based company said. Analysts on average predicted 4.74 billion riyals in profit. Industries Qatar, the country’s largest petrochemicals maker, tumbled for an eighth day, retreating 6.9 percent to 66.4 riyals.

Crude oil for February delivery lost as much as 10 percent to $32.70 a barrel in after-hours trading on the New York Mercantile Exchange.

Taqa declined to 94 fils. The company will spend $3 billion on acquisitions in 2009, a quarter less than originally planned as asset prices fell amid the global financial crisis.

Banks Drop

Saudi British Bank dropped 3.2 percent to 59.75 riyals. The lender that’s 40 percent-owned by U.K. bank HSBC Holdings Plc said fourth-quarter profit fell to 657 million riyals from 705 million riyals in the year-earlier period.

Al-Rajhi Bank lost 0.9 percent to 54.75 riyals. Saudi Arabia’s largest bank by market value said fourth-quarter profit declined 10 percent.

Emaar Properties PJSC slid 6.8 percent to 2.05 dirhams. The United Arab Emirates’ biggest real estate developer plans to raise as much as $4 billion by selling conventional and Islamic bonds.

El Sewedy Cables Holding Co. fell 10 percent to 62.59 Egyptian pounds. The biggest publicly traded maker of cables in the Middle East had its so-called short-term rating cut to “neutral” from “accumulate” at EFG-Hermes Holding SAE because of slower economic growth and increased competition in the region.

The Kuwait Stock Exchange Index slid 2.3 percent, while the Abu Dhabi Securities Exchange General Index lost 2.9 percent. The Bahrain All Share Index dropped 0.5 percent. Jordan’s ASE General Index lost 2.9 percent.

To contact the reporter on this story: Ayesha Daya in Dubai adaya1@bloomberg.netMichael Patterson in London at mpatterson10@bloomberg.net.