Oil rise boosts bourses across the Gulf

All major Arabian Gulf markets rose for a third straight session yesterday, boosted by financial stocks amid rising oil prices, while Saudi Arabia gained sharply as most of its banks increased.

Oil prices rose by 2 per cent, extending a rally from December’s 18-month lows with support from Opec output cuts and steadying share markets.

Saudi Arabia’s index rose 1.5 per cent at 8,048 points to close at its highest since August last year, with 11 of its 12 banks gaining. Saudi Arabia is due to join the emerging market indexes of MSCI and FTSE Russell this year, which is expected to attract $15 billion of passive, index-linked funds and billions more in active funds.

As a result, Saudi Arabia was the favourite market of fund managers polled by Reuters late last month, with 54 per cent expecting to raise their Saudi equity allocations and none to reduce them in the next three months.

Saudi exchange data showed that foreigners were net buyers of 134.3 million riyals of stocks last week. Al Rajhi Bank, the kingdom’s second-largest lender by assets, rose 2.2 per cent to trade at a nearly 11-year high.

It had gained more than 5 per cent in the previous session on plans to increase its capital to 25 billion riyals from 16.25 billion riyals.

Bank Aljazira added 2.7 per cent after proposing a dividend of 0.5 riyal per share for year 2018, up from 0.3 riyal per share a year earlier.

The petrochemical sector was mixed, however, with Saudi’s largest petrochemical maker gaining 1 per cent. But Saudi Arabian Fertilizers dropped 2 per cent; earlier this week, it announced a planned shutdown of its plant for 117 days which, the company said, will cost an estimated 121 million riyals.

In Abu Dhabi, the UAE’s largest lender, First Abu Dhabi Bank, climbed 1 per cent, which helped the index rise 0.6 per cent to 4,934 points, gaining for a third straight session.

The Dubai index edged up 0.1 per cent to 2,535 points with the emirate’s largest lender, Emirates NBD, gaining 2.1 per cent.

In Kuwait, the index was up 0.5 pct at 5,403 points and Oman’s index gained 0.2 pct to 4,312 points. The Bahraini index was flat at 1,331 points.

Egypt’s market was closed on Monday for a public holiday.