Saudi rebounds to erase previous slide

Saudi Arabia’s stock market rebounded sharply yesterday as local institutions bought shares actively.

The Saudi index, which had plunged 7.2 per cent in the previous two days jumped 4.1 per cent to 7,568 points in heavy trade, erasing Sunday’s losses.

A Saudi treasury banker said he believed the rebound was aided by government-linked funds intervening to support the market.

But analyst in Saudi Arabia Khaled Feda, said the market had overreacted on Sunday, creating attractive opportunities to purchase blue chips. Foreign investors were keen buyers yesterday, he said.

The banker said investors were encouraged by news that King Salman had ordered an internal investigation into Jamal Khashoggi’s disappearance after the journalist visited the Saudi consulate in Istanbul, which could hasten the process of resolving the crisis.

The Saudi riyal fell to its lowest level against the dollar in the spot market for two years yesterday, while Riyadh’s international bond prices slipped. But the drops were much smaller than some bouts of instability caused by low oil prices in the last several years.

Petrochemicals and bank stocks lifted the index. The Gulf’s biggest petchems producer, Saudi Basic Industries, rose 3.7 per cent.

Sahara Petrochemical added 6.9 per cent after saying a unit had started marketing polypropylene made by affiliate Al Waha Petrochemicals in the region. Saudi Industrial Export jumped 10 per cent as trade in the rights to its equity issue began.

In Dubai, the index edged down 0.03 per cent to 2,713 points as real estate and industrial shares reversed early gains to trade lower.

Abu Dhabi’s index rose 0.04 per cent to 4,933 points. In Kuwait, the index rose 0.9 per cent to 5,205 points.

Bahrain’s index edged up 0.01 per cent to 1,316 points. Oman’s index lost 0.8 per cent to 4,461 points. In Egypt the stock index slipped 0.1 per cent to 13,521 points.

Meanwhile, Oman’s index dropped 0.8 per cent after a slew of corporate earnings from its banks. Bank Muscat slid 1.9 per cent. Al Anwar Ceramic Tiles dropped 5.9 per cent after its profits fell during the same period.