Saudi Stocks Extend Gains Before Market Opening; Abu Dhabi Slips

17/05/2015 17:33 AST

Saudi Arabian stocks rallied a fourth day as some investors took positions before next month’s market opening and after oil prices stabilized. Abu Dhabi shares declined amid a slump in the value of equities traded.

The Tadawul All Share Index added 0.9 percent to close at 9,814.65, the highest level this month. Al Rajhi Bank, the lender with the biggest weighting on the gauge, led advances and finished at the strongest since Oct. 13. Abu Dhabi’s ADX General Index slid 1 percent, its first drop in six days.

“The Saudi market is edging closer to opening up its doors to foreign investors, which is pushing local investors to position themselves ahead of the actual event,” John Sfakianakis, the Riyadh-based director of the Middle East at investment manager Ashmore Group Plc, said by phone. “Oil has been doing quite well for the last few sessions, holding near $67 a barrel, which is adding to investor confidence.”

OPEC’s biggest exporter is opening a stock market that’s among the world’s least accessible to direct foreign investment for the first time as King Salman pushes ahead with efforts to diversify the economy away from crude. The Riyadh-based Capital Market Authority this month published regulations allowing foreigners access starting June 15. Investors from outside the six-nation Gulf Cooperation Council currently gain entry into shares listed on the market through equity swaps and exchange-traded funds.

Brent crude, a benchmark for half the world’s oil, gained more than 2 percent last week.



U.A.E. Volumes

Al Rajhi added 1.4 percent to 67.53 riyals as it rose a fourth day. Saudi Basic Industries Corp., the world’s top petrochemicals manufacturer by sales, rose 0.9 percent to strongest level since April 30.

First Gulf Bank PJSC, the United Arab Emirates’ third-biggest bank by assets, led the Abu Dhabi index lower as the lender declined 2 percent, the most since since May 4. The gauge fell to 4,584.48 as about 142 million dirhams ($39 million) of shares traded in the emirate, less than half the one-year daily average of about 338 million dirhams.

“The current levels are not supported by enough liquidity, which explains the weariness on part of investors who are waiting for better entry points,” Wadah Al Taha, the Dubai-based chief investment officer of Al Zarooni Group, said by phone today. “It’s a pure lack of catalyst and investors have minimal motivation to enter the market.”

Dubai’s DFM General Index lost 0.1 percent. Qatar’s QE Index rose 0.2 percent and Kuwait’s SE Price Index added 0.1 percent. Bahrain BB All Share Index decreased 0.4 percent.

Bloomberg