Monday , May 27 2019

Insurers drag down Saudi; UAE, Qatar climb

DC_ Banque Saudi Fransi copy


Insurance stocks helped to drag down Saudi Arabia’s market on Wednesday because of fears of a shakeout in the industry, while bourses in the United Arab Emirates and Qatar rose, helped by a bullish global trend in equities.
The main Saudi index sank 2.2 percent to 6,890 points, closing significantly below the 200-day moving average, now at 7,042 points, for the first time since last November.
Shares in 32 of Saudi Arabia’s 33 listed insurance firms tumbled, with several losing more than 7 percent. Only Bupa Arabia, a favourite of foreign investors, escaped a drop, closing flat.
Most insurers had slid after regulators ordered nine insurance brokers to stop business, citing regulatory violations.
The central bank is preparing to introduce a new supervisory framework in coming months that will force insurers to boost capital as well as improve internal risk controls, two people with direct knowledge of the matter told Reuters.
Central bank officials “said half of the companies that are here today will not be here”, one of the sources said. “They want stronger companies in the market.” Bank Aljazira, which had plunged its 10 percent daily limit after announcing it would resubmit a request to the regulator for approval of a $800 million rights issue, fell a further 6.4 percent in heavy trade. Banque Saudi Fransi dropped 2.7 percent in its sixth straight day of falls. The bank said it had appointed an independent team to examine violations related to its employee incentive programme in past years, though it expects no material change in its financial statements.
Among other big losers, petrochemical blue chip Saudi Basic Industries lost 2.8 percent. Telecommunications firm Mobily fell 2.6 percent to an 11-year low.
In Dubai, the index rose 0.8 percent on the back of a 1.4 percent rise by Emaar Properties, while a 2.5 percent rise by Dana Gas helped the Abu Dhabi index climb 1.0 percent.
Qatar rose 1.0 percent, gaining for a fourth straight day in a technical rebound from five-year lows.

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