Tadawul gains on corruption probe
Signs of progress towards settling cases in Saudi Arabia’s crackdown on corruption boosted its stock market yesterday, while Qatar’s bourse rose for a seventh straight day as investors bought ahead of annual dividend announcements.
The Saudi index far outperformed the rest of the region as it rose 1.4 per cent to 7,440 points in active trade, rising above last September’s peak of 7,429 points.
Dozens of Saudi princes, officials and top businessmen – including owners of major stakes in some firms – were detained as part of the crackdown in early November. The market’s initial panic has faded, but investors are still concerned about the fate of some of the companies involved.
On Saturday, family-owned construction giant Saudi Binladin Group, which has seen its chairman and several other members of the family detained, said some of its shareholders might transfer part of their holdings to the state.
The announcement, which confirmed an earlier Reuters report, boosted banking shares yesterday with all 12 listed banks rising. Saudi British Bank jumped 4.6 per cent.
A Saudi banker said the Binladin news appeared positive for the sector in the short term because state ownership might help the recovery of financially troubled Binladin, ensuring that payments to its bank creditors continued.
However, the banker added that it remained unclear whether banks would benefit in the long term, as restructuring Binladin could also involve a restructuring of its debt or more pressure on banks to make provisions or write off some debt.
Meanwhile, shares in Kingdom Holding jumped 7 per cent in heavy trade to 9.31 riyals, their highest close since November 5, when the detention of its chairman and owner Prince Alwaleed bin Talal was announced.
Dubai rose 0.5 percent as real estate blue chip Emaar Properties rose 1.7 per cent. But Abu Dhabi edged down 0.1 percent, despite a 2.6 per cent gain by Waha Capital in active trade.
Elsewhere, Qatar’s index added 0.4 per cent in heavy trade as a broad-based rally continued, with Qatar National Bank , the top lender, gaining 1.1 per cent ahead of its fourth-quarter earnings announcement tomorrow.