Aramco holds sway on Saudi stocks

Saudi stocks suffered their biggest intraday decline since late August yesterday as local institutions sold shares to prepare for Saudi Aramco’s listing, while Dubai was dragged down by its top lender Emirates NBD.

Aramco announced its intention to float on the domestic stock market in what could be the world’s biggest listing as the kingdom seeks to diversify its economy away from oil.

Some local investors could be selling other shares to shift investments to Aramco, in what could be a case of “short-term pain for longterm gain”, said Salah Shamma, head of investment for the Mena region at Franklin Templeton Emerging Markets Equity.

Saudi Arabia’s benchmark index slid 2 per cent, with Al Rajhi Bank losing 1.8 per cent and National Commercial Bank falling 2.5 per cent. The index is down 9 per cent since the start of May.

Saudi British Bank fell 4.9 per cent after it posted a flat third-quarter net profit, held back by higher loss provisions related to its merger with Alawwal Bank. Sabic fell 1.5 per cent.

In Dubai, the index dropped 1.5 per cent as its largest lender Emirates NBD dropped 5 per cent in its biggest intraday fall since December 2018. In a bourse announcement, Dubai Financial Market that investors purchasing Emirates NBD rights should be aware that in addition to the rights purchase price they need to pay Dh8.5 subscription price per share.

Blue-chip developer Emaar Properties eased 0.7 per cent, whereas its unit Emaar Malls fell 2.6 per cent after two straight days of gains.

After the close the malls operator reported a rise in third-quarter net profit. Egypt’s blue-chip stock index extended gains for a seventh day, gaining 0.4 per cent as Sidi Kerir Petrochemicals soared 10 per cent and EFG Hermes advanced 2.5 per cent. The Abu Dhabi index was also up 0.1 per cent with First Abu Dhabi Bank closing 0.4 per cent up.

In Dubai, the index dropped 1.5 per cent as its largest lender Emirates NBD dropped 5 per cent