Savola said it was selling a 2 percent stake in Almarai for 1.12 billion riyals ($308 million) through an accelerated book-building process, with 16 million shares on offer at 70 riyals each. Analysts said the deal could help create liquidity for Savola in case it conducts acquisitions. If the sale is fully completed, Savola will record a profit of 694.1 million riyals in the third quarter, the company said.
Shares in Almarai plunged by their 10 percent daily limit to 73.60 riyals in the heaviest trade since late June. As of Tuesday's close it had risen almost 20 percent this year, outperforming the main market index by a large margin. Banque Saudi Fransi fell 0.6 percent to 31.40 riyals, extending Tuesday's 4.2 percent loss after billionaire Prince Alwaleed bin Talal's Kingdom Holding agreed to buy almost half of Credit Agricole's stake in the Saudi lender.
Analysts are split on how the deal would affect Saudi Fransi. Some believe it is good news to have Alwaleed on the board; others think Credit Agricole may ultimately sell all its shares, hurting the Saudi bank in the long run. Arqaam Capital maintained its "buy" rating on Saudi Fransi with a target price of 35.80 riyals, saying the bank might lose a strategic partner if Credit Agricole sold the rest of its stake, but Saudi Fransi's high dividend was an attraction.
Shares in Kingdom Holding, which are often sparsely traded, added 1.9 percent in relatively active volume after the previous session's 5.1 percent gain. Qatar's index fell 0.5 percent to a 52-month closing low as Qatar Islamic Bank lost 2.0 percent.
Regional Arab investors sold Qatari stocks when Saudi Arabia and three other Arab states imposed an embargo on Doha in early June. With no progress made towards a diplomatic solution to the row, other foreign investors have joined the selling in recent weeks, bourse data shows.
Abu Dhabi's index slipped 0.4 percent, weighed down by declines in blue chips; Abu Dhabi Commercial Bank fell 2.1 percent. But Dana Gas, the most heavily traded stock, climbed 1.3 percent. In Dubai, the index closed almost flat. A Cityscape real estate exhibition in Dubai sparked some interest in property stocks early this week but the effect has worn off because of the uncertain outlook for the emirate's property market.
In Egypt, El Sewedy Electric rose 1.1 percent after the company said one of its subsidiaries had signed a deal worth 620 million Egyptian pounds ($35.2 million) with a local real estate development company, while another subsidiary had signed a contract with a Togo-based utility company for 44 million euros ($52.7 million). The main index fell 0.2 percent mainly, because of a 2.1 percent decline in the most active stock, Qalaa Holdings.
Copyright Reuters, 2017