MARKET REPORT Saudi and Kuwati valuations rise

Saudi stocks rose 1.8 per cent yesterday on the back of a surge in oil prices, while Kuwaiti shares gained on hopes of more foreign fund flows after inclusion in the FTSE Russell emerging market index.

Oil prices jumped to a fouryear high, helping to push petrochemicals giant Saudi Basic Industries up 2.8 per cent, refiner Petro Rabigh 1.6 per cent and Al Rajhi Bank 2.6 per cent.

The Saudi index closed at 7,905 points above its 200-day average, which analysts see as a positive technical signal for the index.

Its dive below the average earlier this month, for the first time this year, triggered heavy selling by technical investors.

Shares of Al Tayyar Travel plunged 7.6 per cent on news that Saudi Arabian Airlines has ended its contract with the firm to provide travel services to students enrolled in the Ministry of Education. It closed at 20.54 riyals, its lowest closing price since listing.

Ticketing contracts for the Ministry of Education accounted for 30 per cent and 32 per cent of the total value of reservations, according to the financial statements of 2015 and 2016 respectively, it said.

Kuwait’s index rose 1.1 per cent as it entered the first phase of its entry into the FTSE Russell emerging market index on Monday. The second stage will be on December 24.

“There’s more activity due to Kuwait’s inclusion in the emerging market index,” said Marie Salem, director of capital markets at FFA Dubai.

There is more value in Kuwaiti companies and their potential will be harnessed by more foreign funds, she said.

Arqaam Capital said in a report this month that $1 billion of passive inflows are expected following the index inclusion.

National Bank of Kuwait and Kuwait Finance House each climbed 1.5 per cent.

The premier index has already gained more than 11 per cent year to date. Investment activity increased this quarter ahead of the inclusion in the index, boosting the market by nearly 8.87 per cent.

In Dubai, the index was flat, while Qatar’s index was 0.2 per cent lower, weighed down by a 1 per cent decline in Industries Qatar and a 0.8 per cent drop in Qatar Insurance.

The Egypt index climbed 1.1 per cent on the back of a 1.5 per cent gain in Commercial International Bank of Egypt and a 2.9 per cent rise in tobacco maker Eastern Company.