Middle Eastern Stocks Rally as China Flags Scope for Stimulus

28/02/2016 15:15 AST

Stocks across the Middle East advanced after China’s central bank governor highlighted scope for further policy stimulus in the world’s biggest commodities user.

The Tadawul All Share Index rose 1.6 percent to 6,073.90 at 2:17 p.m. in Riyadh, poised for the highest level since Jan. 11. Dubai’s DFM General Index gained 1.7 percent and Qatar’s QE Index climbed 0.8 percent. Abu Dhabi’s ADX General Index advanced for the first time in three days. Kuwait’s SE Price Index rose 0.7 percent, extending gains for a fourth day, the gauge’s longest winning streak since November.

Emerging-market stocks on Friday ended a three-day losing streak as China’s assurance that it has room to ease monetary policy allayed concern that the nation’s economic slowdown is worsening. China is the biggest market for crude after the U.S., and is a key trading partner of countries across the six-nation Gulf Cooperation Council, where oil accounts for the bulk of government revenue.

“The world seems to be a better place this week,” said Saleem Khokhar, the head of fund management and equities at the asset management group of National Bank of Abu Dhabi PJSC, the United Arab Emirates’ biggest bank. “Comments from China’s central bank governor, in terms of combating currency speculation, were positive because it’s important for long-term stability in demand for oil.”



Saudi Rally

Stocks in Saudi Arabia, whose biggest trading partner is China, were led by Saudi Basic Industries Corp., one of the world’s biggest petrochemicals manufacturers by sales. The company’s shares were headed for the highest close in about two months.

Saudi Real Estate Co. gained 3.5 percent after the company said it hired Boston Consulting Group to prepare a feasibility study and business plan to start two companies. National Shipping Co. climbed 0.8 percent, headed for the highest level in about a month, after its unit agreed to buy five tankers for $166.5 million.

The Bloomberg GCC 200 Index, which tracks 200 of the largest companies in the region, gained 1.3 percent to the strongest level since Jan. 7.

Oman’s MSM 30 Index dropped 0.1 percent. The country’s sovereign credit rating was cut by Moody’s Investors Service last week, which cited the negative impact of lower oil prices on government finances, economic performance and balance-of-payments.



Egypt Advances

Egypt’s EGX 30 Index rose 1.2 percent to the highest level in almost three weeks on 75 percent of the 12-month full-daily average trading volume.

Arabian Food Industries Co., an Egyptian producer of juice and dairy products known as Domty, is proceeding with plans to raise 1 billion Egyptian pounds ($128 million) in an initial public offering next month, Al Borsa newspaper reported on Sunday.

The sale would be the country’s first since June, when real-estate developer Emaar Misr came to the market. That company’s stock has since lost more than 40 percent of its value.

“Domty going through with its IPO shows that there’s still appetite in the market for consumer goods stocks,” said Mohamed Radwan, the head of equities at Cairo-based Pharos Holding.

“But the low volumes show investors are still cautious about putting their money in this market, and are waiting for more clarity about the direction of global markets and oil prices.”

Bloomberg