The Saudi benchmark stock index fell, posting the biggest fluctuation among Arab equity markets today, as investors judged recent gains excessive. National Shipping of Saudi Arabia paced declines.
Qatar's key stock index slid as investors sold stocks to buy shares in initial public offerings in the Persian Gulf. Ten of 13 Arab equity markets tracked by Bloomberg News fell today, including those in Dubai, Abu Dhabi, Kuwait and Oman. Markets in Jordan, Tunisia and Lebanon rose.
The Tadawul All Share Index fell for a second day, losing 4.7 percent to 18,740.2 in Riyadh, according to the exchange's Web site. It reached a record high on Feb. 25.
``This is a long overdue correction as prices have climbed to highs,'' said Haissam Arabi, head of asset management at Dubai, United Arab Emirates-based Shuaa Capital, which manages about $2.2 billion in Arab equities.
The Capital Market Authority on Feb. 25 lowered the amount that shares are allowed to fluctuate each day to five percent from 10 percent. The index has increased by about 13 percent since the beginning of the year.
Arabi said investors had shrugged of an al-Qaeda attempt on Feb. 24 to blow up the Abqaiq oil center in the kingdom, which handles two-thirds of the supply from the world's biggest oil exporter. The Saudi stock market is resilient to such attacks or threats of future attacks, said Arabi.
National Shipping Company, which operates oil tankers, fell 4.9 percent to 478 Saudi riyals in Riyadh. Saudi Basic Industries Corp. (SABIC), the world's biggest chemical producer by market value, lost 4.9 percent to 1,650 Saudi riyals.
Qatar's benchmark Doha Securities Market Index shed 3 percent to a nine-month low of 8822.9, according to the bourse's Web site. The measure has lost 16.2 percent so far this month.
``Investors are diluting their holdings to buy new shares in regional initial public offerings,'' Amjad Resheq, general manager of Qatar-based International Financial Securities, said in a telephone interview.
Tamweel, a United Arab Emirates real estate finance company, started a $150 million IPO today that is open to all Persian Gulf investors and expatriates. The company is selling 550 million shares at 1.2 U.A.E. dirhams apiece.
Ithmar Bank of Bahrain plans to raise $337.5 million in an IPO open to all investors. The investment bank is selling 150 million shares at $2.25 apiece. It will later list its shares in the Bahrain and Kuwait stock markets.
Qatar Islamic Bank, the country's largest lender that complies with Muslim law, fell 4.6 percent to 268.2 Qatari riyals.
Qatar Telecom, the fixed-line and mobile phone monopoly in the country, dropped 4.2 percent to 201.2 Qatari riyals.
Abu Dhabi, Dubai
The Abu Dhabi General Index fell 2.7 percent to 4579.5, according to the stock exchange's Web site. Of the 39 stocks that traded, 28 slid, ten rose and one was unchanged. The benchmark has dropped 13.8 percent so far this year.
``It's the classical case of sell-off to raise money for IPOs,'' said Mohammed Yassin, general manager of Emirates Securities, in a telephone interview.
Besides the Tamweel and Ithmar IPO's, the second telephone operator in the United Arab Emirates plans to raise $660 million in an offering that starts March 4.
Emirates Integrated Telecommunication Co. will sell 800 million shares, or 20 percent of the company's capital, at 3.03 dirhams each to U.A.E. investors only.
Finance House (FH), a lender based in Abu Dhabi, led decliners, losing 7.4 percent to 14.4 dirhams.
Emirates Telecommunications Corp. (ETISALAT), the largest telephone operator in the United Arab Emirates, fell 6.2 percent to 28 dirhams.
The Dubai Financial Market index fell 2.2 percent to 828.8. The measure is down 18.7 percent so far this year.
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