Bank shares lead Saudi index higher

Saudi Arabia’s stock market rose sharply yesterday, lifted by cheaper valuations and a delay in Aramco’s IPO, while other major Gulf markets were mostly weighed down by shares of financial institutions.

The Saudi market rose 2 per cent to 7,784.94, extending gains for a third straight session with all banking stocks higher. The kingdom’s largest lender by assets, National Commercial Bank, jumped 5.3 per cent, its biggest intraday gain since September 2018. Al Rajhi Bank closed 1.7 per cent higher.

Akber Khan, head of asset management at Al Rayan Investment in Doha, said that before the Tadawul index began to rally last week, it had fallen almost 20 per cent in the previous three months, with half of that in October alone, bringing valuations for many stocks to compelling levels.

“News of a delay in the Aramco IPO removed an overhang and gave investors the confidence to start buying again” he added. Aramco put off the planned launch of its initial public offering in the hope that pending third-quarter results will bolster investor confidence in the world’s largest oil company.

Aramco was expected to announce plans this week to float a stake of between 1 and 2 per cent on Tadawul, in what would have been one of the world’s largest public offerings yet, worth upwards of $20 billion.

In Egypt, the benchmark index added 0.2 per cent, closing at 14,239.45, with Commercial International Bank rising 1.4 per cent, while Egypt Kuwait Holding was up 1.5 per cent. However, Egypt’s Qalaa Holdings fell 0.8 per cent despite saying that it will increase its refinery production capacity to 5.5 million tonnes of oil products per year in 2021, from 4.2 million now.

Dubai’s index extended losses from the previous session to close 0.5 per cent down at 2,766.09, with its largest lender Emirates NBD dropping 1.2 per cent. On Thursday, the lender posted its biggest intraday fall in nearly eight months after its board approved a capital increase via a rights issue of up to Dh6.45 billion.

In Abu Dhabi, the index inched down to 5,089.74 as Etislat and Abu Dhabi Commercial Bank lost 0.4 per cent each. But Sharjah Islamic Bank rose 1.7 per cent after reporting a rise in nine-month net profit.