Saudi steady after attack

Local funds support

DUBAI, Sept 16, (RTRS): Saudi Arabian stocks were supported by domestic funds on Monday after top oil producer Saudi Aramco assured some clients that there will be no supply shortage as a result of Saturday’s attack on its facilities. The attack shut about 5% of global supply, sending oil prices as much as 19.5% higher, their biggest intra-day percentage gain since 1991’s Gulf War.

Despite Aramco’s assurance, concerns remain over oil supply which could be disrupted if the outage continued for long, while a full return to normal oil production volumes “may take months”, sources told Reuters.

It could also have a wider impact on Saudi Aramco’s planned initial public offering (IPO) on its home market. “The attacks could complicate Aramco’s IPO plans given rising security risks and potential impact on its valuation, ”Eurasia wrote in a note to clients. After losing 1.1% on Sunday, the country’s stock market index closed 1% higher with its biggest lender National Commercial Bank surging 4.2% and Al Rajhi Bank rising 1.4%.

Traders cited buying by local and regional investors, as most foreign active investors have already exited the index,which is trading roughly flat year-to-date after it rose as much as 20% at its peak in May. “Our channel checks suggest most of the ‘active’ foreign money in KSA has already exited the market and what is left is passive funds, who have to stay invested,” said Vrajesh Bhandari, senior portfolio manager at Al Mal Capital.

It means local and regional institutions and retail investors are calling the shots and that supply can be relatively better controlled with some support from domestic funds, Bhandari added. Other major Gulf markets also rose as cheaper valuations attracted the investors.

The Abu Dhabi index rose 1.7% boosted by a 2% jump in the United Arab Emirates’ biggest lender First Abu Dhabi Bank and a 2.6% Emirates Telecommunications Group “In terms of fundamentals, certain high quality companies across MENA are currently being undervalued and investors are gradually adding to their exposure,” Bhandari said.

Qatar’s index gained 1.1% with petrochemical maker Industries Qatar up 2.3% and Qatar National Bank 1.3% higher. In Dubai, the index was down 0.3% with the market heavyweight lender Emirates NBD gaining 0.8%.

The emirate’s largest lender has risen 17.5% this month after it raised its foreign ownership limit to 20% from 5% and announced its intention to lift the limit to 40%.

Outside the Gulf, Egypt’s blue-chip index was down0.4% with real estate investment firm Talaat Mostafa Group Holding dropping 2.1%.

Saudi Arabia

The index rose 1% to 7,827 points

Abu Dhabi

The index rose 1.7% to 5,161 points

Dubai

The index was up 0.3% to 2,878 points

Qatar

The index gained 1.1% to 10,512 points

Egypt

The index lost 0.4% to 14,970 points

Bahrain

The index fell 0.7% at 1,524 points

Oman

The index slipped 0.3% to 4,009 points

Kuwait

The index declined 2.2% to 6,101 points