MIDEAST STOCK MAR­KETS

Kuwait Times - - BUSINESS -

Strength in sec­ond-tier stocks favoured by lo­cal re­tail in­vestors boosted Saudi Ara­bia’s stock mar­ket yes­ter­day, while for­eign buy­ing helped Egypt par­tially re­bound from a drop on Sun­day and most other Mid­dle East bourses fell.

Saudi Ara­bia’s in­dex climbed 0.9 per­cent to 6,904 points, ris­ing above ma­jor tech­ni­cal re­sis­tance on its April peak of 6,876 points. A sec­ond con­sec­u­tive close above that level would be very bullish tech­ni­cally and point to the in­dex reach­ing around 8,400 points in the long term. The Saudi mar­ket has been strong since the king­dom’s $17.5 bil­lion in­ter­na­tional bond is­sue in late Oc­to­ber partly eased con­cern about Riyadh’s abil­ity to cope with an era of cheap oil.

Banks and petro­chem­i­cals led the mar­ket in the ini­tial stages of its rally, but un­der­per­formed on Mon­day with ac­tiv­ity fo­cused on un­usu­ally heavy trade in sec­ond-tier stocks such as Tabuk Agri­cul­tural De­vel­op­ment Co, which was up 6.2 per­cent. Real es­tate de­vel­oper Ja­bal Omar gained 4.2 per­cent af­ter say­ing it had ended a con­tract with builder Saudi Bin­ladin Group, set­tling an out­stand­ing 196 mil­lion riyal ($52.3 mil­lion) debt to Bin­ladin by trans­fer­ring to it own­er­ship of units in a pro­ject. One blue chip which rose sharply was real es­tate de­vel­oper Dar Al Arkan, the most heav­ily traded stock, which surged 4.4 per­cent. The mood was more sub­dued else­where, with lit­tle fresh cor­po­rate news to spur buy­ing. Dubai’s in­dex fell 0.8 per­cent as Union Prop­er­ties, the most heav­ily traded stock, pulled back 4.6 per­cent af­ter Sun­day’s 11.4 per­cent rise. Abu Dhabi’s in­dex dropped 1.0 per­cent as telecom­mu­ni­ca­tions blue chip Eti­salat fell 1.4 per­cent, while Qatar slipped 0.5 per­cent as Qatar Na­tional Bank lost 1.1 per­cent. Kuwait’s in­dex edged up 0.1 per­cent, show­ing lit­tle ini­tial re­ac­tion to par­lia­men­tary elec­tions at the week­end in which op­po­si­tion can­di­dates were es­ti­mated to have won around 20 seats out of 50. But Mon­ica Ma­lik, chief econ­o­mist at Abu Dhabi Com­mer­cial Bank, said the op­po­si­tion’s strong show­ing might dampen Kuwait’s growth in the medium term, since ma­jor eco­nomic projects could be de­layed by po­lit­i­cal fric­tion.

“These re­sults point to the pos­si­bil­ity of a more con­tentious re­la­tion­ship be­tween the govern­ment and the Na­tional As­sem­bly than was seen be­tween 2013 and 2016, when the op­po­si­tion was a mi­nor­ity,” she wrote. The Egyp­tian in­dex, which had tum­bled 1.8 per­cent on Sun­day as its rally in re­sponse to the Nov. 3 float of the Egyp­tian pound lost steam, re­bounded 1.0 per­cent on Mon­day.

Ex­change data showed for­eign in­vestors were net buy­ers to the tune of about $11 mil­lion, an un­usu­ally large mar­gin. Raya Hold­ing for Fi­nan­cial In­vest­ment jumped 8.1 per­cent af­ter say­ing it was close to fi­nal­iz­ing an agree­ment for Egyp­tian Gulf Bank to take a 20 per­cent stake in its new Aman e-pay­ments unit. — Reuters

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