Re­gion rises as Saudi gains for ninth day

Kuwait Times - - BUSINESS -

Ma­jor stock mar­kets in the Mid­dle East rose slightly yes­ter­day, out­per­form­ing slug­gish bourses in Asia and Europe, as Saudi banks con­tin­ued re­bound­ing on the back of Oc­to­ber’s huge in­ter­na­tional bond is­sue by their govern­ment.

The bond is­sue has al­lowed the govern­ment to sus­pend, at least tem­po­rar­ily, do­mes­tic bond sales and, in con­junc­tion with other steps, this has started to ease a liq­uid­ity crunch in the bank­ing sys­tem due to low oil prices. Short-term Saudi money rates have fallen in the last two days. That has sus­tained a rally in the stock mar­ket, where the main in­dex climbed for a ninth straight trad­ing day yes­ter­day, gain­ing 0.6 per­cent in ac­tive trade. It has surged 10.1 per­cent dur­ing the nine-day pe­riod, although it is still 10.3 per­cent be­low its July peak.

The bank­ing sec­tor in­dex added 0.5 per­cent as the big­gest lender, Na­tional Com­mer­cial Bank, rose 0.7 per­cent. On Sun­day it had rock­eted 7.7 per­cent in its heav­i­est trade since July 2015. Among other gain­ers, telecom­mu­ni­ca­tions firm Zain Saudi and miner Ma’aden both rose 3.5 per­cent. As money flowed into such stocks, the petro­chem­i­cal sec­tor un­der­per­formed, edg­ing up only 0.2 per­cent.

A monthly Reuters poll of fund man­agers, Reuters was 499.3 mil­lion riyals.

In Egypt, the in­dex climbed 0.3 per­cent, although ex­change data showed for­eign in­vestors were net sell­ers by a large mar­gin as the Egyp­tian pound con­tin­ued to slide against the US dol­lar on the black mar­ket.

Three cur­rency traders were buy­ing dol­lars yes­ter­day for 17.5 to 17.85 pounds and sell­ing them to im­porters for 18 to 18.2 pounds, com­pared to an of­fi­cial ex­change rate of 8.88. Mas­sive un­cer­tainty over the risk of a de­val­u­a­tion of the pound is de­ter­ring many for­eign in­vestors from build­ing po­si­tions. — Reuters

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