22/03/2011 00:00 AST
Most Gulf Arab markets rose on Monday, but gains prompted by Saudi Arabia’s latest SR500 billion social spending plan were tempered by doubts over how this would be implemented.
Saudi Arabia’s index (TASI), the largest Gulf Arab market, rose 0.2 percent, having surged 4.5 percent on Sunday, with regional markets rallying after the kingdom offered SR500 billion in social handouts in a bid to neuter dissent.
The Saudi market closed at 6357.37 points after gaining 13.58 points. The sector activity for the day was all positive except two losing sectors.
The gaining sector ranged from 0.02 percent by the industrial investment sector to 1.72 percent by the real estate development sector. On the other hand the losing sectors were the telecommunication and information technology sector and the banks and financial services sector with -0.27 percent and -0.29 percent.
The overall market breadth for the day was positive with 88 advancers against 41 decliners giving it an AD ratio of 2.14. The liquidity for the day reached SR4.52 billion, the Financial Transaction House (FTH) — licensed by the Capital Market Authority — said in its daily market report.
“I think we will have a day or two more to go, but then questions will start to come about the time frame for the Saudi stimulus and the costs associated to waste at the bureaucratic level,” said Robert McKinnon, ASAS Capital chief investment officer. “Much of the stimulus is going to the people that are happy and have jobs, or own companies and land. I don’t see any intent at actual reform.”
Market bellwether Saudi Basic Industries Corp. (SABIC) rose 0.5 percent, but lender Samba Financial Group fell 0.9 percent.
“Attention toward stock and sector fundamentals remain distracted, with big-picture geopolitical events in Libya, Yemen and Bahrain dominating investor’s minds,” said Amro Halwani, a senior trader at Shuaa Capital in Riyadh.
“Whilst most markets across the GCC fret over the escalation of tensions, at least Saudi investors have the reassurance of massive government financial intervention, and therefore presumably a sensible floor under equity prices.”
Abu Dhabi’s index rose for a second day, climbing 0.5 percent, but Dubai’s benchmark ended a three-session rally, slipping 0.2 percent.
National Bank of Abu Dhabi and First Gulf Bank add 2.2 and 1.6 percent respectively.
Property-related stocks weighed on Dubai, with contractor Drake & Scull and builder Arabtec sliding 1 and 2 percent respectively.
“Markets are at very attractive levels — now is a good time to accumulate, but one should always be aware of political risk,” said Adel Nasr, United Securities brokerage manager.
Kuwait’s index climbed 1 percent on slim volumes. “There’s a lot of volatility, with the market fluctuating and no clear trend because of the security situation in the region, Zain and the large number of companies that have yet to report their full-year results,” said Naser Al-Nafisi, general manager for Al Joman Center for Economic Consultancy in Kuwait. Telecom operator Zain rose 1.5 percent.
Oman’s index climbed 0.2 percent in its third straight gain, while Bahrain’s measure added 0.7 percent. Qatar index fell 0.6 percent.
Reuters
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