STOCK-NEWS-MIDEAST-SABIC slips to 5-mth low as petchems sold off

0815 GMT – Saudi Basic Industries Corp (2010.SE: ) (SABIC)
slumps to a five-month low, with declining oil prices seen as
negative for both petrochemical product prices and future global
economic activity.

SABIC falls 6.2 percent, taking its losses to 25 percent
since reaching a 19-month closing high on May 4 as it tracks oil
declines. Crude is down 2.8 percent at $68.26 a barrel at 0804
GMT and has fallen 21 percent since May 3 as euro zone worries
spur a flight from riskier assets. [O/R]

“If SABIC continues to fall, then it will be a very good
buying opportunity because I don’t think oil prices will stay
around current levels and will rise to the high $70s to low
$80s, but when this will happen is another matter,” says Thamer
Gadallah, head of investments at Almana Group.

Petrochemical producers’ profits are closely tied to oil
prices, says Gadallah.

“Compared to international peers, SABIC is cheap after
falling so much – this decline was based on sentiment. Investors
aren’t calculating the real value of the company when they
sell.”

Saudi Arabia’s index (.TASI: ) falls 3.1 percent to 5,989
points.

Rabigh Refining and Petrochemical Co (2380.SE: ) falls 8.1
percent and Sahara Petrochemicals Co (2260.SE: ) drops 7.5
percent.

BASF (BASF.DE: ), the world’s largest chemical maker by sales,
is down 3.4 percent in Germany.

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0745 GMT – Industries Qatar (IQCD.QA: ) (IQ) tumbles to a
10-month low as declining oil prices spur investors to dump
petrochemical stocks, weighing on Doha’s index (.QSI: ).

IQ falls 5.3 percent to its lowest level since July 15.

“SABIC and IQ are both totally driven by oil prices, so I
don’t think either will rise during the coming days unless oil
starts to head back towards $80 and I don’t see that happening
yet,” says Thamer Gadallah, head of investments at Almana Group.
“Foreigners have been selling IQ for the past few days.”

Saudi Basic Industries Corp (2010.SE: ) (SABIC) has fallen 20
percent since hitting a 19-month closing high on May 4.

Oil (CLc1: ) is down 2.7 percent at $68.31 a barrel at 0732
GMT on growing concerns Europe’s debt crisis would derail the
global economic recovery, prompting investors to sell riskier
assets in a flight to dollar safety. [O/R]

Other Qatar stocks also slide. Qatar National Bank (QNBK.QA: )
falls 2.7 percent, Commercial Bank of Qatar (COMB.QA: ) drops 4.7
percent and Qatar Gas Transport Co (QGTS.QA: ) (Nakilat) loses 4.5
percent.

The index falls 3.4 percent to 6,700 points, its lowest
level since Feb. 7.

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0741 GMT – Egypt’s main index (.EGX30: ) falls sharply in
early trade, tracking losses in Europe and Asia.

The 30-company index sheds 5.2 percent in early trade, with
big caps registering strong losses across the board.

Orascom Telecom (OT) (ORTE.CA: ) drops 5.4 percent, Orascom
Construction Industries (OCI) (OCIC.CA: ) falls 3.9, and
Commercial International Bank (CIB) (COMI.CA: ) falls 3.6 percent.

“The whole sentiment is negative. It is not a local issue,
it is more global sentiment,” says Teymour el-Derini of Naeem
Brokerage.

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0720 GMT – Bank Muscat (BMAO.OM: ) plunges as investors dump
Oman stocks to send the index (.MSI: ) to a 2010 low, with
declining global markets sparking selling across the Middle
East.

Bank Muscat falls 6 percent 0.774 rials, hitting its lowest
level since Feb. 10. Other lenders also drop. National Bank of
Oman (NBO.OM: ) loses 3.3 percent and Bank Sohar (BKSB.OM: ) dips
5.5 percent.

“Bank Muscat looks a good buy, but I would prefer to wait
and see what happens internationally before stepping in,” says
Sayed Quadry, vice-president of business development at Amwal
Investment in Muscat.

“Some investors fear Gulf banks will have to take fresh
provisions as a result of the euro zone crisis, so why would
they take the risk? Many are saying that no matter how strong a
bank is, it is better play safe and exit.”

The index falls 2.8 percent to 6,266 points, its lowest
level since Dec. 29.

Asia stocks fell to multi-month lows, the euro slid and oil
and higher yielding currencies weakened on Tuesday on fears that
Europe’s sovereign debt woes will trigger a renewed crisis in
the continent’s banking sector. [MKTS/GLOB]

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0620 GMT – Emaar Properties (EMAR.DU: ) tumbles as Dubai’s
index (.DFMGI: ) slumps to an 11-week low, with nervy investors
tracking steepening losses on international markets. [MKTS/GLOB]

Emaar falls 4.5 percent to its lowest level since early
March, accounting for more than half of the shares changing
hands on the index. The stock is the bellwether for the market
and also the most liquid, so investors can more easily sell,
exacerbating declines.

Arabtec (ARTC.DU: ) falls 3.6 percent as investors ignore
comments from its chief executive saying the builder should
receive cash from Dubai World [DBWLD.UL] unit Nakheel’s
[NAKHD.UL] debt restructuring by end-June. [ID:nLDE64J18K]

Investors also overlook the latest assurances from UAE
officials over Dubai World’s debt deal. [ID:nLDE64N1BV]

On Monday, they came from central bank governor Sultan bin
Nasser al-Suweidi: “Banks are finding the Dubai World proposal
as very much agreeable.”

Suweidi says in a final deal, banks will get better terms as
for the interest rate than proposed by the state-owned
conglomerate.

“The final outcome will be somewhat more acceptable than 1
percent,” he adds.

But as Dubai World’s tortuous debt saga appears to be
nearing an end, speculation is now switching to Dubai Holding —
owned by the emirate’s ruler — which has about $10 billion in
outstanding debt.

When asked about Dubai Holding potentially restructuring its
debt Suweidi echoed his previous comments saying: “The worst is
behind us.” He did not elaborate.

Dubai’s index falls 2.0 percent to 1,614 points, its lowest
level since March 8.

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0540 GMT – Middle East markets are seen extending declines
on Tuesday following further losses on international bourses,
with investors scared that Europe’s sovereign debt woes will
trigger a renewed crisis in the continent’s banking sector.

Europe’s fumbling response to a Greek debt crisis and
bulging deficits in other euro-zone countries have unnerved
markets over the past six weeks, and a central bank takeover of
a Spanish lender stoked fears of a wider meltdown. [MKTS/GLOB]

The Nikkei (.N225: ) is down 2.8 percent at 0435 GMT, slumping
to its lowest level since Dec. 1, while the Dow Jones industrial
average (.DJI: ) fell 1.2 percent overnight. Oil (CLc1: ) is down
1.5 percent to $69.16 a barrel at 0435 GMT. [O/R]

Middle East markets are unable to escape this malaise, with
Saudi Arabia (.TASI: ) and Egypt (.EGX30: ) slumping to their lowest
closes since early January on Monday.

“The large Saudi stocks are going down on low volumes –
trading has fallen by about a third in the last month — which
means there are no big buyers in the market, even at lower
prices,” says Saleh al-Onazi, vice-president of principal
investment at Swicorp in Riyadh.

High volatility means people are largely ignoring technical
and fundamental indicators, says Marwan Shurrab, vice-president
and chief trader at Gulfmena Alternative Investments.

“It’s pure sentiment and this is bearish, which is why Dubai
(.DFMGI: ) broke 1,680 on Monday, despite expectations it would
hold above this level,” he says.

“The index could be heading towards 1,600, but international
volatility is extremely high so we don’t know how the market
will react on a day-to-day basis. There are no catalysts to
allow our markets to move away from international markets.”

Egypt is wilting and aggressive selling in its once-buoyant
telecoms sector is likely to continue, says Mohamed Radwan of
Pharos Securities. Cyclical names like Ezz Steel Rebars
(ESRS.CA: ) and some real estate stocks are also under pressure.

Canny investors will switch to non-cyclical stocks that are
based on domestic demand such as banks and utilities, he adds.

Investment Research

(Reporting by Matt Smith, additional reporting by Shaimaa
Fayed; Editing by Dinesh Nair)

STOCK-NEWS-MIDEAST-SABIC slips to 5-mth low as petchems sold off