Riyad Capital downgrades Tasnee to ‘hold’

Riyad Capital said it has downgraded National Industrialization Co. (Tasnee) to “hold” from “buy,” and reduced its share target price to SAR 27 from SAR 30.

The investment arm of Riyad Bank said the move was due to declining prices of petrochemical products and an unclear short-term vision.

It also warned that Tasnee may incur higher expenses this year if this trend continues through June. The company’s business is also being impacted by Euro exchange rates.

The brokerage firm highlighted unrealized losses seen by Tasnee during the first quarter of this year.

Argaam reported last month on the company’s SAR 332.4 million net loss in the first quarter, which showed a steep drop compared to the SAR 320.8 profit it made in Q1-2014.

The diversified industrial firm said it would cut costs and revise foreign exchange and derivatives contracts at its Cristal subsidiary, one of the world’s largest producers of titanium dioxide.