Saudi stocks gain 11.8% since global bond issue

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JEDDAH: Saudi Arabia’s Tadawul All-Share Index (TASI) rose 0.8 percent on Sunday taking its gains since the bond issue to 11.8 percent. Banks continued to firm, with Saudi Hollandi Bank adding 1.6 percent.
TASI has gained 1.56 percent in the past six trading days. The value of traded shares reached SR3.19 billion Sunday with a volume 223.34 million.
Petrochemical shares traded lower early in the day but then rebounded and Saudi Kayan jumped 4.5 percent. The shares of Saudi Basic Industries Corp. (SABIC) rose 0.24 point.
The petrochemical industries index has gained 5.6 percent so far this year.
Domestic-demand oriented shares were also strong, with apparel retailer Fawaz Alhokair gaining 5.2 percent.
Brent crude lost 1.7 percent on Friday, owing to the prevailing uncertainty regarding the OPEC’s output cut deal.
Key crude oil contracts Brent and WTI ended at $45.58 (down 1.7 percent) and $44.07 (down 1.3 percent), respectively. On a weekly basis, the oil prices posted the largest drop since January 2016, Al-Rajhi Capital stated in its latest market update.
On Thursday, the report said that TASI gained 70.84 points or 1.18 percent to close at 6,060.46. All the 15 sector indices closed higher. The advance decline ratio was 151/15. Trading turnover was around SR 3.18 billion.
The Capital Market Authority issued draft rules for the new secondary market, part of efforts to boost the role of small and medium enterprises in the economy.
The record international bond sale and higher oil prices led to TASI rising by 10 percent last month, Jadwa Investment stated in a separate report.
TASI’s positive performance last month was also accompanied by a rise in market turnover. After six consecutive monthly declines in market turnover, October saw a rise of 7 percent month-on-month, although it was still below the year-to-date average.
“The TASI seems to be much better value, as price-to-earnings has moved in-line with regional markets,” Jadwa economists stated.
The total value of shares traded for the week ending Nov. 3 amounted to SR16.17 billion, increasing by 0.28 percent over the previous week.
The total stock market capitalization reached SR1.43 trillion at the end of this period, increasing by 1.65 percent over the previous week.
John Sfakianakis, director of economic research at the Gulf Research Center, commented: “Investors are reacting to the positive news: Default risk is tumbling, liquidity is slowly increasing and confidence returning as the nation is committed to economic reforms.”
Dubai’s index was the worst performer in the region on Sunday, falling 0.6 percent. DXB Entertainments pulled back 2.6 percent.
Qatar’s index slipped 0.1 percent to 9,949 points, a four-month low, but closed 72 points off its intra-day low. Commodities producer Industries Qatar dropped 1.3 percent but mobile telephone operator Vodafone Qatar closed up 1.1 percent.
Egyptian blue chips jumped for a second straight day on Sunday after the central bank floated its currency last week, raising hopes for new inflows of funds.
The Egyptian blue chip index added 6.1 percent in heavy trade to reach its highest level since April 2015. It was the index’s biggest rise since March this year. The broader EGX100 index gained 3.8 percent.Commercial International Bank (CIB) soared its 10 percent daily limit.
As the country’s largest listed bank, CIB is expected to benefit from an increase in trade and financial flows if the currency devaluation succeeds and foreign exchange business returns to banks from the black market.
The index gained 3.4 percent on Thursday, when the central bank abandoned the Egyptian pound’s peg of 8.8 to the US dollar and let it drop to around 15.50. On Sunday, the pound fell further to around 16, but the decline was much less than many bankers had expected, which reassured some investors.
“Sunday’s market performance surpassed Thursday’s because traders have a better knowledge of how the market is pricing the currency after years of it being artificially constrained,” said Ibrahim Nimr, technical analyst at Cairo’s Naeem Brokerage.
Nimr noted that the liberalization of the currency meant Egypt was closer to securing a $12 billion International Monetary Fund loan, which he thought would keep the market optimistic for a few months.
He predicted the index, which closed on Sunday at 9,350 points, would probably break 10,000 points in its current rally.
Credit Agricole rocketed 17 percent after reporting that nine-month consolidated net profit climbed to 956.7 million Egyptian pounds ($59.8 million) from 748.3 million pounds a year earlier.
Global Telecom Holding surged 7.5 percent to 5.48 Egyptian pounds. EFG Hermes said in a note that the stock should benefit from the devaluation as it reprices to reflect the US dollar value of its London-listed global depositary receipts .

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