Weak petrochemical stocks weigh on Tadawul

JEDDAH: Stock markets in the Gulf were mixed on Thursday with Dubai rising despite a fall in crude oil prices, while Saudi Arabia’s decline was cushioned by hopes it will be put on review for possible emerging market status next week.

Riyadh’s stock index lost 0.5 percent after Brent crude dipped below $47 a barrel; all but one of the 14 listed petrochemical producers fell, with National Industrialization Co. (Tasnee) dropping 3.7 percent.

Jassim Al-Jubran, senior equity analyst at Riyadh-based Aljazira Capital, said the stock market’s losses were relatively small because most funds had been moving into shares that would benefit from any decision by index compiler MSCI next Tuesday to place Riyadh on review for possible upgrade to emerging market status.

“Funds can withstand volatility in oil markets because they build long-term positions, and the MSCI review next week is higher on their list,” said Al-Jubran.

The National Commercial Bank added 0.8 percent after its board recommended a cash dividend of SR1.1 per share for the first half of the year, up from the SR0.6 paid out for the prior-year period.

The Saudi Arabian Monetary Authority responded to the US Federal Reserve’s 25 basis point rate hike by lifting its reverse repo rate, at which commercial banks deposit money with the central bank, by the same amount to 1.25 percent but keeping its repo rate, used to lend money to banks, unchanged at 2 percent.

This is expected to be net positive for Saudi banks’ margins, but shares of other lenders were mostly lower on Thursday because the move had largely been priced in. Alawwal Bank fell 0.9 percent.