Saudi index up for fifth straight day

Stock markets in Saudi Arabia climbed yesterday while the rest of the region was sluggish, with a slide in Dubai blue chip Emaar Properties dragging down that market once again.

In Saudi Arabia, the index gained 0.6 per cent, rising for a fifth straight day.

The market is bullish because of expectations for foreign fund inflows in the coming two years as the kingdom joins emerging market indexes.

Petro-Rabigh was the biggest gainer, surging 7.9 per cent to its highest level since October 2014. It will go ex-dividend next Wednesday.

With a trailing price-earnings ratio of about 17 times and a dividend yield of 1.8 per cent, the stock is no longer cheap by some measures.

“The anticipated fund flows are large, so a lot of stocks are just moving on momentum now,” said one Saudi fund manager.

Telecommunications firm Zain Saudi closed 3.6 per cent higher in its heaviest trade since April 2017, but well off its intra-day high.

Dubai’s index sank 1.4 per cent as Emaar Properties slipped 3.6 per cent.

The stock has been dragged down this year by a weaker Dubai real estate market.

Strong bank earnings failed to boost stocks. Dubai Islamic Bank dropped 1.8 per cent after reporting a 17 per cent rise in quarterly net profit, while the biggest bank, Emirates NBD, fell 0.5 per cent despite posting a 27 per cent increase in quarterly profit that beat analysts’ estimates.

In Egypt, the blue chip index slid 0.5 per cent as major financial services firm Pioneers Holding plunged 10 per cent to 9.58 Egyptian pounds after saying it would increase its capital by 30 per cent.

New shares will be sold to existing shareholders at 5 pounds per share.

Meanwhile, China’s surprise central bank move, signs of easing geopolitical tensions and progress in US-North Korea relations helped emerging stocks climb higher yesterday, though currencies were more mixed.

MSCI’s emerging market index added 0.3 per cent in a second day of gains, with much of the momentum coming from Asian bourses where heavyweight South Korea ended the day 1 per cent higher while Hong Kong and mainland China bourses were not far behind.