A broker monitors stock prices on a screen at the Saudi Investment Bank in Riyadh. The main Saudi stock index climbed 1.4% to a fresh six-year high of 10,163 points yesterday.
Reutres/Dubai
Saudi Arabia’s stock market gained yesterday on the back of the blue chips which are expected to be bought when the market opens to direct foreign investment. But rises slowed after Tuesday’s leap.
The main Saudi index climbed 1.4% to a fresh six-year high of 10,163 points. Petrochemicals giant Saudi Basic Industries (Sabic) added 4.8% and Al Rajhi Bank, the largest listed bank, gained 1.1%.
The benchmark had jumped 2.8% on Tuesday after Saudi authorities said they planned to allow foreign institutional investors to buy local stocks from the first half of 2015.
But the euphoria diminished yesterday and trading volume shrank as some investors took a more realistic view of how much money will actually enter the country in the next 18 months.
The regulator is expected to allow foreign inflows to increase only slowly, in order to avoid destabilising the market.
Also, in contrast to the United Arab Emirates and Qatar when MSCI decided in mid-2013 to upgrade them to emerging market status, the Saudi market is not cheap at present; Capital Economics estimates it is trading at about 19.3 times earnings, above a long-run average of below 17 times.
Sabic, for example, closed at 129.25 riyals and is now near the 130 riyal median target of 14 analysts surveyed by Reuters.
Among other gainers yesterday was Saudi Electricity Co, which climbed 1.5% after it said it would receive a payment of 1.5bn riyals ($400mn) from oil giant Saudi Aramco as settlement of claims for using its electricity transmission systems.
Meanwhile, markets in the UAE and Qatar pulled back yesterday. Dubai’s bourse slipped 0.2% because of property-related stocks; builder Arabtec fell 1.7%, and Emaar Properties and Union Properties were down 2.1 and 1.9% respectively.
Emirates REIT bucked the trend, rising 1.4% after it reported net profit for the first half of this year jumped 194% to $34.15mn.
Abu Dhabi’s benchmark edged down 0.3% amid a mixed performance by major banks. National Bank of Abu Dhabi slid 1.4%, even though the lender beat analysts’ estimates of its second-quarter profit and raised its full-year profit outlook.
But Abu Dhabi Commercial Bank and First Gulf Bank, both of which reported quarterly results in line with estimates on Tuesday, added 2.4 and 0.8% respectively.
The Qatar Stock Exchange index closed marginally lower yesterday by 68.86 points (-0.52), but maintained its lead over the 13,100.44 points registered July 15 by +89.12 points when the bourse finished the day’s trading at 13,189.56 points.
The trading value reached QR 628.314mn with a volume of 14,459,863 share from 11,074 transactions.
The market capitalisation of QR 704.630bn yesterday is a decrease by 1.16% compared to QR 712.786bn at close of trading on Tuesday.
Three companies registered hectic trading with volumes between one and two million shares. This prevented further dip in the all-share index yesterday.
From the banking segment, Masraf Al Rayan, riding on a 10.1% increase in its first half profit of QR 904mn, made a slight gain of 0.18% with a volume of 1,799,822 shares from 998 trades to close at QR 56.20 (+10 dirhams).
Real estate index was the only one in the green zone today, up 1.14 points (+0.04%) to close at 2,956.75 points.
Barwa, the only real estate company to gain today, traded a volume of 1,738,463 shares from 767 transactions to close at QR 44.90 up 0.22% (+10 dirhams).
Ezdan Holding share dropped a substantial -7.3% to lose QR 1.70 and close at QR 21.60. The losing scrip saw a volume of 3,610,711 shares from 1,822 transactions.
Vodafone Qatar, the third company to witness a million plus volume of 1,176,610 shares from 525 transactions, closed at QR 19.70, marginally up by 0.31%.
Steel-to-petrochemicals conglomerate Industries Qatar fell 1.2% and Gulf International Services (GIS), which provides drilling and other services to firms such as Qatar Petroleum, slid 1.5%.
GIS reported a 75% jump in second-quarter profit yesterday morning, but that failed to impress. Half-year profit totalled 463.7mn riyals ($127.4mn), in line with the company’s projection in April that full-year profit would come to 900mn riyals.
Eleven companies made marginal gains today, 27 declined and four remained unchanged.
Qatari individual investors today bought a volume of 8,003,615 shares of 41 companies worth QR 321.878mn (51.23%) and sellers off loaded a volume of 7,315,559 shares of 41 companies worth QR 291.071mn (46.33%).
Qatari institutional investors today bought a volume of 2,447,193 shares of 39 companies worth QR 127.934mn (20.36%) and sellers off loaded a volume of 3,674,924 shares of 39 companies worth QR 174.418mn (27.76%).
Elsewhere, the Kuwait index edged up 0.3% to 7,118 points, the Bahrain index slipped 0.2% to 1,471 points and the Oman index edged up 0.2% to 7,201 points.
