Saudi stocks rise 0.9%; Dar Al-Arkan up 9.3%

11/07/2016 05:08 AST

Saudi Arabia’s stock market rose 0.9 percent Sunday aided by solid gains in mid-cap companies ahead of the start of second-quarter earnings season this week. Property developer Dar Al-Arkan, a favorite of speculative retail investors, accounted for more than half the shares traded on the whole exchange on Sunday.

It ended the day up 9.3 percent, its highest close since Oct. 19. Retailer Fawaz Alhokair gained 4.1 percent, and Al-Tayyar Travel Group was up 3.1 percent after it announced an agreement with Starwood Hotels to rebrand a recently-refurbished hotel in Makkah as a Sheraton.

Dubai’s measure also rose, ending the day 0.4 percent higher on the back of the 5.6 percent increase recorded by construction firm Arabtec, another favorite stock for speculators. In Abu Dhabi, the emirate’s bourse slipped from the 9-1/2 week closing high posted in the previous session to end Sunday 0.2 percent lower.

This was despite continued speculation about more mergers and acquisitions activity in the emirate after a spate of big deal announcements, including a proposed merger of First Gulf Bank and National Bank of Abu Dhabi.

Union National Bank was 2.3 percent higher, and Abu Dhabi National Energy Company rose 3.9 percent, taking their gains in the past four sessions to 12.5 percent and 10.2 percent respectively.

Both are seen as among the most plausible candidates for consolidation, following confirmation last week that the boards of National Bank of Abu Dhabi and First Gulf Bank had agreed to a merger. These two banks closed flat and 0.4 percent lower respectively on Sunday.

Their proposed deal came days after the government ordered a tie-up between state investment funds Mubadala and International Petroleum Investment Company. Egypt’s stock market posted its largest one-day gain in nearly four months on Sunday as speculation over a further currency devaluation in the North African country combined with positive global cues to propel the exchange higher.

In the first day of trading after the Eid Al-Fitr holiday, Egypt’s main index jumped 4.7 percent. The surge came after a 2.9 percent increase last Monday, the last session before the holiday, following comments from Egypt’s central bank governor which said the Egyptian pound should be a market-based currency where demand and supply set the price.

Economists now believe it is inevitable there will be another currency devaluation in the current fiscal year.

Real estate-related stocks were among the biggest winners on Sunday, building on substantial gains in the last session. They, as well as tourism-focused and export-orientated firms, are seen benefiting from a currency devaluation.

Developers Talaat Mostafa Group Holding and Sixth of October Development and Investment Co. (SODIC) closed limit up, and Ezz Steel and South Valley Cement rose 7.2 percent and 7.9 percent respectively.

Sunday was also the first day when markets across the Middle East could absorb gains notched up by global markets at the end of last week following consensus-beating jobs data in the United States.

In Saudi Arabia, the bourse rose 0.9 percent, aided by solid gains in mid-cap companies ahead of the start of second-quarter earnings season this week.

Arab News