Saudi stocks recover most of Sunday’s losses

07/06/2016 02:10 AST

Saudi Arabia’s stock market rose on Monday as the Kingdom prepared to announce details of its economic reform plan. Other Gulf markets were mixed as the start of Ramadan thinned trading volumes.

The National Transformation Plan, part of reforms intended to make the Saudi economy less dependent on oil revenue, was to be presented to the Cabinet for approval late on Monday. Details were to be disclosed in daily news conferences with ministers starting on Monday evening.

It was not clear which economic policies would be discussed in the news conferences, but the broad reform plan is known to include subsidy cuts, tax increases, sales of state assets, a government efficiency drive and efforts to spur private-sector investment. The Saudi stock index dropped 1.2 percent on Sunday as local investors worried about the austerity measures. But stocks drifted back up in thin trade on Monday and the index closed 1.0 percent higher.

Saudi Basic Industries Corp, which could be hurt by future cuts in energy and gas feedstock subsidies and fell 3.6 percent on Sunday, rebounded 2.2 percent on Monday. However, telecommunications company Zain Saudi, which jumped its 10 percent daily limit on Sunday after signing an SR2.25 billion ($600 million) loan refinancing, fell 4.2 percent. Dubai’s index dropped 0.2 percent as Dubai Islamic Bank fell 1.8 percent. The stock has been under pressure for most of the time since its rights issue started trading on May 30; the last day of trading those rights will be June 13.

Abu Dhabi’s index rose 0.4 percent, led by volatile trade in First Gulf Bank, which dropped early on but closed 0.8 percent higher.

Qatar gained 0.7 percent, buoyed by second-tier banks such as Qatar Islamic Bank, up 1.2 percent, and Qatar Commercial Bank, which was 2.4 percent higher.

In Egypt, the index climbed 1.0 percent on the back of strength in emerging markets. Commercial International Bank , the biggest lender, rose 2.9 percent in its heaviest trade since last November.

EFG Hermes gained 2.7 percent to an 11-month high. On Sunday, the company said Lebanon’s central bank had approved its sale of a 40 percent stake in Credit Libanais; EFG Hermes’s board agreed in March to sell a 40 percent stake in Credit Libanais to Arab and Lebanese investors at $33 per share, and to sell its remaining shares by next May.

Arab News