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Saudi falls from 15-month high on weak earnings Bourse slips on Monday due to under-performance in petrochemical sector; should remain stable if oil prices stay above $100 a barrel
Saudi kingdom's petrochemical sector index lost 0.9 percent, underperforming the wider benchmark, which declined 0.6 percent. Saudi Basic Industries Corp (SABIC), the world's largest chemicals producer, fell 1.3 percent after two of its units posted below-forecast net profit for the second quarter. SABIC's earnings, which are yet to be released, will feel a slight pinch from its subsidiaries' underperformance. Yanbu National Petrochemical Co (Yansab) declined 1.7 percent and Saudi Arabian Fertilizer Co (Safco) retreated 0.2 percent. Petrochemical companies, such as Safco and Yansab, have little upside due to stretched valuations, analysts said. "Safco was substantially below our estimates because urea prices were low in Q2 and Yansab was also unable to beat expectations," said Muhammad Faisal Potrik, research analyst at Riyad Capital. Riyad Capital has a 'hold' recommendation on both stocks. Potrik however said the outlook for the sector is stable, providing oil prices stay above $100 a barrel. The banking sector's index slipped 0.9 percent, as investors booked gains after most lenders posted solid profit growth for the second quarter http://english.ahram.org.eg/News/76542.aspx