Tadawul index up 0.3%

21/06/2016 01:46 AST

Saudi Arabia’s Tadawul All-Share Index gained 0.3 percent Monday in modest trading volume.

The index gained 16.52 points to close at 6,558.92 points. The value of traded shares reached SR3 billion.

Builder Abdullah Al-Khodari advanced 1.2 percent on hopes the construction sector is due for a surge in demand because of the 2.5 percent tax on undeveloped urban commercial and residential land approved by the cabinet late last week.

The tax may push more land out into the market where it can be developed. But companies with large land banks could lose; NCB Capital said in a note that the tax would have a negative impact on Dar Al-Arkan, as annual fees on its current land bank would be between SR137 million and SR160 million ($36.5 million and $42.7 million). The stock fell 0.8 percent. Egypt’s main index came off early lows but closed down 1.8 percent at 7,204 points, breaking technical support on the April and May lows of 7,276-7,327 points.

That triggered a complex head & shoulders pattern formed by the highs and lows since March and pointing down to around 6,700 points.

Telecom Egypt (TE) dropped 2.1 percent after the industry’s regulator said it was selling 4G licenses under a long-awaited plan to reform the sector while letting mobile operators, such as Vodafone Egypt, offer fixed-line services, ending TE’s domination of the sector.

A note by Cairo-based Naeem Brokerage said the competition in fixed-line licenses could be a cause of concern for Telecom Egypt in the long run as the wholesale business could take a hit. But Naeem continues to rate the stock a “buy.” Vodafone Egypt, which could now face more competition in mobile, slumped 7.5 percent.

The entire stock market has been depressed by Thursday’s interest rate hike, which surprised most investors, and the benchmark is down 7 percent since June 8. More rate hikes look possible as the central bank battles inflation.

Arab News