Saudi index hits highest in a year

TADAWUL BENCHMARK TOPS 8,000, GAINS MORE THAN 12% SO FAR THIS YEAR

The Saudi index breached the keenly watched 8,000 mark to hit its highest level in a year as traders piled in money betting on stocks ahead of the potential inclusion on the MSCI emerging market index.

The Tadawul index hit its highest level in 52 weeks at 8,100.60, before closing 0.59 per cent higher at 8,098.04. The index has gained more than 12 per cent so far this year. In contrast, the Dubai index has shed 7 per cent since January.

“Saudi is taking a lot of liquidity at the expense of other markets. The danger is that there would be a round of profit-taking as you push up prices increasing valuations. Overtime, people will think that there may be no need to be so active in Saudi stocks as the implementation will be a year away, so they will take profits,” said Sanyalaksna Manibhandu, head of research, First Abu Dhabi Bank Securities.

The MSCI is widely expected to include the Tadawul index in June, a move that is expected to attract tens of billions of dollars of passive money into the kingdom.

Sluggishness

However, stock indices in Dubai and neighbouring Abu Dhabi fell yesterday, extending losses for another session, continuing their sluggishness for another amid lower volumes.

The Dubai Financial Market General index closed 0.29 per cent lower at 3,131.33. Traded value continued to remain on the lower side.

“Traded value has slumped in Dubai. We have big results from Dubai Islamic Bank (DIB) and Emirates NBD. If the management gives a positive outlook, Dubai will try to recover some lost ground. In the medium term, money will be coming back to Dubai from Saudi as people re-assess,” Manibhandu said.

Emaar Properties stayed sideways. Emaar Properties closed 0.51 per cent lower at Dh5.85, and DIB closed 0.71 per cent higher at Dh5.65. The Abu Dhabi Securities Exchange general index closed 0.52 per cent higher at 4,706.76. Elsewhere in the Gulf, the Qatar exchange index closed flat at 8,958.00.