Saudi Arabia’s market extended losses yesterday, edging down to another three-week low as investors cut positions ahead of the Ramadan Holy Month amid a mixed bag of earnings. Qatar and the UAE’s markets rallied on earnings optimism.

In Saudi Arabia, investors sold bank stocks, adjusting their portfolios after most lenders reported second-quarter earnings. Al Rajhi Bank dropped 2%, Alinma Bank fell 2.6% and Samba Financial Group slid 1.6%. Samba, after market hours, said it would issue a dividend of 0.80 riyals per share for the first half of 2012.

Saudi Kayan, a unit of Saudi Basic Industries Corp (Sabic), fell 2.7% to a three-year low. Kayan’s shares have dropped 10.3% since it posted a wider quarterly loss that missed estimates. Sabic lost 0.3% ahead of its quarterly earnings release, expected on Wednesday.

The kingdom’s index slipped 0.8% to 6,589 points, its lowest close since June 27.
“The market is moving in a sideways pattern between 6,550 and 6,850 and needs to break out of these levels for clear direction,” said Mateb Ghanim, portfolio manager at Amlakuna Investment Group. “We might see an accumulation pattern after Ramadan.”
Ramadan fasting is expected to start around July 20 and many investors will return to the market after it ends.

Yamamah Cement lost 1.5%. It reported a second-quarter net profit of 209mn riyals compared to 220mn riyals in the year-earlier period.

“Yamamah Cement has reported a disappointing set of results for Q2 with all profit lines declining 2% to 5% year-on-year and 12% lower than our estimates,” NCB Capital said in a research note. “We believe the weak results are mainly attributed to the lower-than-expected cement sales and lower cement prices.”

In the UAE, Dubai’s index rose 0.9% to a 10-week high of 1,529 points as investors picked up stocks on earnings optimism.

“The index broke the 200-day (exponential) moving average at 1,505-1,515 and this gives it more strength towards 1,546 in the near term,” said Amjad Bakir, head of Mena Corp Securities.

Bellwether Emaar Properties gained 1.2% to close at 3.27 dirhams per share, continuing a four-day rally on the back of strong quarterly earnings expectations.
“Emaar is trading near a very strong resistance level of 3.33 (this year’s peak) and at the same time, it’s showing a bearish divergence on the half-hour chart,” Bakir added, suggesting profit-taking at this price level.

Elsewhere in the Gulf, Abu Dhabi’s benchmark climbed 0.2% to 2,463 points; Oman’s index gained 0.1% to 5,504 points; Kuwait’s index eased 0.07% to 5,856 points, while Bahrain’s measure gained 0.1% to 1,116 points.