BHB back in the red after four months of gains

MANAMA: After recording gains for four consecutive months, Bahrain Bourse (BHB) was back in the red last month to close at 1,427.18 points with a month-on-month decline of 0.5 per cent.

Peaking at a gain of 3.33pc to 1,482.24 points by mid-October, the Bahrain All Share index logged consistent daily declines during the second half, ending the month in negative territory, shows the October review of regional stock markets by Kuwait-based Kamco Invest.

As a result, the YTD-2020 decline for the Bahrain index reached 11.4pc by end-October 2020.

The flattish performance for the benchmark came mainly after gains in the insurance and services indices were completely offset by decline in the rest of the market.

Trading activity remained mixed during the month with higher trades in cheaper stocks.

The monthly volume chart was topped by GFH Financial Group with 49.2 million shares followed by AUB and Ithmaar Holding with 15.5m and 11.7m shares, respectively.

On the monthly value traded chart, AUB topped with shares worth BD12.3m followed by GFH Financial Group and Batelco with BD7.5m and BD5m worth of traded shares, respectively.

The insurance index gained 6.6pc during the month while the services index gained 6.4pc.

The services index was buoyed by gain in shares of Batelco, which was up 10.9pc and further supported by Bahrain Cinema and Trafco with gains of 12.5pc and 7.53pc, respectively.

These advances were partially offset by a 23.3pc decline in shares of Nass and 5.3pc decline in shares of Bahrain Duty Free Complex.

Shares of Seef Properties also declined by 1.2pc during the month.

Shares of Batelco gained after the telco reported 41pc increase in net profits during Q3-2020 despite a 1pc decline in revenues during the quarter.

The increase in net profit was due to additional charges related to voluntary employment retirement programme during Q3-2019 that was not reported in Q3-2020.

Among the decliners, the commercial banks index dipped 2.1pc followed by industrial and investment indices with declines of 2pc and 1.3pc, respectively.

In the banking sector, shares of four out of five banks fell during the month with BBK reporting the biggest decline of 5pc followed by Al Salam Bank Bahrain and National Bank of Bahrain (NBB) with drops of 4pc and 1.9pc, respectively.

Shares of BBK slid after the bank reported a 29.7pc decline in profits during 9M-2020 that was due to a 28pc decline in net interest income during the period, along with a decline in non-interest income.

However, provisions were significantly lower during 9M-2020 at BD6.8m as compared with BD19.6m during 9M-2019.

NBB also reported a 23pc decline in 9M-2020 net profits but unlike BBK, the decline in profits of NBB was led by higher operating expenses that almost doubled during 9M-2020 as well has higher provisions of BD14.2m as compared with BD6.3m during 9M-2019. The bank reported strong net interest income growth of 22.6pc year-on-year whereas its non-interest income saw marginal growth.

The decline in the industrial index was solely due to a 2pc decline in shares of Alba that reported losses of BD11.6m during Q3-2020 as compared to profits of BD11m during Q3-2019.

The losses during the quarter were mainly due to lower revenues as well as negative forex impact.

Meanwhile, in the Investment sector, only Khaleeji Commercial Bank reported a gain of 2.6pc while the rest of the stocks in the sector showed a decline.

The wider GCC equity market declined for the first time in seven months as the number of Covid-19 cases once again surged globally leading to lockdowns in several cities in the absence of a vaccine.

The MSCI GCC Index closed at a 10-week low level by the end of October-2020 to report a monthly decline of 2.1pc.

In addition, the sentiments of GCC investors, who had defied growth in Covid-19 numbers during the previous months, was also affected by the initial cues from the Q3-2020 earnings. Trading trends during the month clearly showed a second half weakness as companies started reporting Q3-2020 numbers.

In terms of YTD-2020 returns, the decline during October-2020 once again pushed all the GCC equity markets back in the red.




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