Saudi bourse gains as oil price firms, but UAE lags

06/10/2016 05:38 AST

Saudi Arabia’s petrochemical stocks rallied yesterday after Brent crude oil firmed over $51 a barrel, while Egypt climbed for a third straight session as investors anticipated approval of its International Monetary Fund loan programme.

Riyadh’s stock index closed up 1.1% as the petrochemical sub-index rose 3.4% with all 14 listed producers advancing.

Yanbu National Petrochemicals (Yansab) jumped 5.9% to 46.80 riyals and National Petrochemical surged 8.2% to 15.15 riyals.

Analysts at NCB Capital said in a note that Yansab was one of their top picks in the sector because of superior efficiency and low debt levels.

They maintained an “overweight” rating on the stock with a price target of 50.40 riyals. Analysts at Bahrain’s SICO said: “Yansab is in a strong position as it is now a ‘cash cow’ with no near-term large capex requirements. Double-digit cash flow yield should support the high single-digit dividend yield.” They rate the stock a “buy” with a target of 53.00 riyals. NCB also upgraded National Petrochemical to “overweight” with a price target of 17.30 riyals, citing greater efficiency following a two-month shutdown and attractive valuations.

SICO upgraded the stock too, to “buy” with a target of 19.00 riyals. Saudi Arabia’s three top telecommunications stocks were mixed in a second straight session of heavy trade after the government said it would provide operators with “unified licences” allowing them to offer a full range of services.

Zain Saudi rose 4.7%, taking its gain over two days to 14.8%. Its chief competitor Saudi Telecom retreated 2.3% and Mobily fell 0.8%. Builder Al Khodari jumped 4.0% in active trade after it said it had signed a contract with miner Ma’aden to construct an aluminium producing facility for 49mn riyals ($13.1mn).

In Egypt, the index of the 30 most valuable shares gained 2.1%, taking its rise for the week to 6.2%.

Egyptian Resorts was the top gainer in the index, jumping 5.5%. Many investors think Egypt’s $12bn IMF loan programme may be finalised in the next few weeks.

Egypt’s deputy finance minister told Reuters yesterday the IMF would discuss Egypt’s loan at a “future” executive board meeting, not at its annual meeting this week. Dubai’s index pulled back 1.3% to 3,362 points, its lowest close in 12 weeks. It turned technically bearish on Monday when it broke technical support on the August and September lows of 3,430-3,442 points, which became immediate resistance.

Losers outnumbered gainers 23 to three. Builder Drake and Scull dropped 3.8% and DXB Entertainments, which is due to open its theme parks in Dubai this month, lost 1.3%.

Banks weighed on Abu Dhabi’s stock index, which closed 0.4% lower. Union National Bank retreated 3.7% and First Gulf Bank lost 0.9%.

Mobile operator Ooredoo led the falls, closing down 0.8%. The Kuwait index added 0.04% to 5,355 points.

Kuwait’s National Investments Co jumped 5.7% after it said it was appointed to execute the purchase of a majority stake in Kuwait Food Co on behalf of one of its clients. Kuwait Food rose 0.8%, and the general market index edged up 0.04%. The Oman index edged up 0.1% to 5,616 points.

Gulf Times