Saudi Telecom drags Tadawul lower

Markets Wrap: Saudi Telecom weighed on the kingdom's equity index yesterday after third-quarter results failed to match analyst expectations.

Saudi Telecom's display at the Gitex Exhibition in Dubai last week. Third-quarter results fell short of expectations. Ali Haider / EPA

Saudi Telecom weighed on the kingdom's equity index yesterday after third-quarter results failed to match analyst expectations. Net income reached 1.95 billion riyals, against a forecast of 2.42bn riyals.

Saudi Telecom (STC) attributed its higher net profit to growth in its broadband and business-sector services as well as higher revenue from international operations. But investors were left wanting more.

"The market had been hoping for a slightly better dividend, hoping that there would be more money to distribute as domestic business started to do well, offsetting the international business" said Saleem Khokhar, the head of equities at National Bank of Abu Dhabi. "But with the miss on the international business, investors will have to reset expectations."

STC's shares dropped 3.4 per cent to 42 riyals. The Tadawul All-Share Index fell 0.4 per cent to 6,780.00 points.

In Egypt, the Cairo bourse was weighing an agreement with Istanbul's exchange that would allow Turkish investors to buy Cairo-listed shares and vice versa. The EGX 30 Index fell 1.4 per cent to 5,716.79.

In the UAE, RAK Bank said third-quarter profits surged 16 per cent on higher income and lower provisions. .

The Abu Dhabi Securities Exchange General Index was little changed at 2,652.45 points, while the Dubai Financial Market General Index slipped 0.2 per cent to 1,649.69.

Elsewhere in the region, Bahrain fell 0.4 per cent to 1,062.62. Oman slipped 0.08 per cent to 5,709.17. Qatar edged down 0.05 per cent to 8,538.21.

* With Reuters