Saudi's SABIC in biggest drop in 5 months after Q4

Saudi petrochemical giant's quarterly profit misses estimates, with investors little moved by its expectations for a better performance in 2011

SABIC, also known as Saudi Basic Industries Corp and the largest company on the Saudi bourse, fell 3.2 per cent, its biggest drop since August 7 and second straight decline following Monday's 28-month high.
The state-linked firm's quarterly profit rose 27 per cent to $1.55 billion, narrowly below analyst forecasts.
"While the reported numbers reflect a strong operating environment, the market might be slightly disappointed...given the increase in fertiliser and petchem prices from Q3 to Q4," Mahdi Mattar, head of research & chief economist at CAPM Investment, wrote in a research note.
"While (SABIC'S) valuation seems full and the room for further earnings growth is limited, we expect the stock to perform well if oil prices remain in this range."
On Wednesday, SABIC said it expected higher profitability and sales in 2011 as petrochemical prices rise to pre-crisis levels.
Saudi Arabia's index dropped 0.9 per cent to a two-week low.
Egypt's benchmark index EGX30fell 0.7 per cent to an 11-week low, taking its losses to 7.1 per cent this week as foreign investors cut exposure to Middle East markets seen as vulnerable to political instability spilling over from Tunisia.
Four Egyptians set themselves on fire this week, echoing a self-immolation in Tunisia that spurred the protests which brought down president Zine al-Abidine Ben Ali.
"We saw individual cases of self-burnings in Egypt and people are scared we are going to have a Tunis moment," said Hani Saad of Delta Rasmala Securities. "When foreign investors feel the first hint of political risk they will pull out and will start shorting liquid stocks in Egypt."
Abu Dhabi's Aldar Properties fell 2.9 per cent, resuming a decline sparked by its unveiling of a restructuring plan that will be dilutive to shareholders and also includes $2.9 billion in impairments.
Dubai's index fell 0.2 per cent. It is down 74 per cent from a January 2008 peak as similar declines in Dubai house prices and the emirate's debt problems stymie investor hopes that shares will rebound.
"UAE valuations are the lowest in the region, especially compared to underlying assets and book value, but the problem is that there are few catalysts," said Walid Shihabi, Shuaa Securities chief executive. "If we don't have these, the UAE market will continue to lag in the medium term."
Shares in Doha Bank fell 3 per cent after the lender's fourth-quarter profit missed estimates and it announced plans for a 15 per cent capital increase, weighing on Qatar's index, which made its largest decline in eight weeks.
"The results were a disappointment because of higher provisions for bad loans," said Jaap Meijer, AlembicHC senior analyst. "The bank's capital increase was a surprise and should dilute EPS (earnings per share) by circa 6 per cent."