ADX gains on financials and energy stocks

Abu Dhabi outperformed among mixed regional stock markets on Thursday, with Saudi Arabia extending a rebound following several days of profit-taking.

The Abu Dhabi index closed 1.7 per cent higher, supported by the financial and energy sectors. Abu Dhabi National Energy Company or Taqa jumped 5.9 per cent to a 40-month closing high and was the most heavily traded stock. After several years of struggling with low oil prices, the company’s earnings have started to improve and last month, the Abu Dhabi government folded Taqa’s parent, utility Abu Dhabi Water & Electricity Authority, into its newly established department of energy – a move which could benefit the company.

First Abu Dhabi Bank, the biggest bank, surged 3.8 per cent.

In Saudi Arabia, buyers continued returning to the market for a second straight day following a sell-off of several days when investors booked profits in the wake of FTSE Russell’s decision to upgrade Riyadh to emerging market status.

The Saudi index closed 1 per cent higher, with blue chips Al Rajhi Bank and Saudi Basic Industries rising 2.3 and 2.1 per cent, respectively.

“Looking ahead, we expect to see the level of inflows ... seen so far in 2018 continue, especially as the likelihood of Saudi Arabia’s inclusion into the MSCI EM index has been greatly increased following the FTSE EM inclusion,” Fahad Alturki, head of research at Jadwa Investment, said.

A decision on Saudi Arabia’s inclusion in the MSCI emerging markets index is expected in June.

The Qatari index was the other big climber, closing 1 per cent up. Banking stocks led gains with heavyweight Commercial Bank finishing 3.9 per cent up and Qatar National Bank rising 2.6 per cent.

Dubai’s index dropped 0.3 per cent in its fourth straight day of declines. Emirates NBD was the main drag on the index, tumbling 3.3 per cent as it went ex-dividend. Emaar Properties slipped 0.5 per cent as worries continued about the outlook for the property market.

Egypt’s index fell 0.6 per cent. Real estate developer Talaat Mostafa, which had soared in recent days to its highest level since the company was listed in November 2007, last traded 10 per cent lower in heavy volume.