Stock News: Mixed Earnings, Weak Oil May Dampen Gulf Markets

Gulf stock markets may slow their advance on Wednesday after local firms reported a mixed set of fourth-quarter earnings and oil prices extended losses.

Oil slid in early Asian trade on Wednesday after touching its lowest in nearly six years in the previous session, with analysts predicting further falls as oversupply plagues the market. Brent crude is around $46 a barrel.

Falling oil prices will directly affect the earnings of petrochemicals companies, but stocks in the sector have already suffered heavy losses and may now be less sensitive to oil.

Some may even gain on earnings announcements, such as Saudi Arabia’s Yanbu National Petrochemical Co (Yansab), which on Tuesday reported a 39.7 per cent rise in fourth-quarter net profit.

Yansab, a unit of Saudi Basic Industries, made a net profit of SAR617.8 million ($164.6 million) in the three months to Dec. 31 while analysts polled by Reuters had on average forecast SAR558.3 million.

However, banking sector results were less impressive on Tuesday after a series of estimate-beating reports from Saudi Arabian banks earlier this week.

Saudi Investment Bank reported a 14.8 per cent rise in fourth-quarter profit, in line with analysts’ estimates.

Qatar National Bank (QNB), the largest lender in the Gulf, posted a 3.3 per cent rise in fourth-quarter net profit on Tuesday, slightly missing estimates. QNB made a net profit of QAR2.45 billion in the quarter; the average forecast of analysts polled by Reuters was QAR2.57 billion.

However, QNB’s proposed 2014 dividend of QAR7.5 per share may sweeten the pill as analysts had expected the payout to be flat at QAR7.

In Kuwait, shares in food company Americana may come under pressure after sources familiar with the matter told Reuters on Tuesday that the firm’s sale was close to being put on hold, partly due to differences on price.

Private equity funds KKR and CVC were among the main contenders for the business in a lengthy bidding process that also attracted interest from Saudi food producer Savola Group, among others. Savola shares have been boosted by speculatiom that it may take over Americana.