Renaissance—one of the biggest oil services companies in the Middle East – discovered evidence of fraud and ethical misconduct at one of the Topaz subsidiaries abroad, centred around the use of $ 2.9mn of cash in the business, it said yesterday. It also reported a 77-percent plunge in first-half net profit.
The stock plunged 10% to its lowest close since July 2009.
“I see it (Topaz) being directly run by Renaissance for the next couple of quarters at least as this serious business and management can’t afford to get this wrong,” said Ibrahim Masood, senior investment officer at Mashreq bank. “From an initial read of statement, it is not comprehensive in terms of exactly what the serious issues were at Topaz and I think that we will continue to hear more about this as we go forward.”
Oman Telecommunications Co supported the index, rising 1.1%. Al Anwar Ceramic Tiles Co climbed 2.2%.
Muscat’s benchmark ended flat.
In the UAE, both Dubai and Abu Dhabi bourses ended lower.
Dubai’s index fell 0.6%, taking year-to-date losses to 9.8% and Abu Dhabi’s measure eased 0.02%.
“After a high volatility week in UAE markets last week, investors are waiting for news from Europe and US markets and searching for signs of market stability,” said Ashraf Abu Shakra, equity portfolio manager at Al Mal Capital.
Etisalat was the main drag in Abu Dhabi, closing 0.5% lower. Aldar Properties declined 0.8% and Abu Dhabi Commercial Bank slipped 0.7%.
Elsewhere, Kuwait’s measure edged up in late trade, closing 0.2% higher.
Saudi Arabia’s bourse also rose edging 0.3% higher to 6,136 points led by banks.
Egypt’s measure rose 0.4% to 4,649 points and Bahrain’s measure slipped 0.01% to 1,267 points.
