|04 March, 2019

Mideast Stocks: Saudi market extends gains ahead of FTSE inclusion

Takaful Emarat gains after FY cash dividend

A Saudi trader observes the stock market on monitors at Falcom stock exchange agency in Riyadh, Saudi Arabia February 7, 2018.

A Saudi trader observes the stock market on monitors at Falcom stock exchange agency in Riyadh, Saudi Arabia February 7, 2018.

REUTERS/Faisal Al Nasser

Saudi Arabian stocks registered a fifth straight session of gains on Monday, ahead of the market's entry to the FTSE Russell's emerging market index in a little more than two weeks, rising along with most major Middle Eastern markets.

The Saudi stock exchange expects passive fund inflows of between $15 billion and $20 billion this year as it gears up for inclusion in emerging market benchmarks, its chief executive told Reuters on Thursday. 

Saudi stocks will become the largest Middle East market in the FTSE Emerging Index with an overall weighting of 2.7 percent, according to index compiler FTSE Russell.

The Saudi index rose 0.4 percent on Monday, helped by petrochemicals stocks, with Sipchem 2310.SE up 3.3 percent in active trade after saying it completed maintenance activities for its polybutylene terephthalate plant.

Petrochemicals investor Alujain added 0.4 percent after providing an update on a fire in its affiliate's plant. The firm said it expects the plant to start operating in the first half from October 2019.

The Dubai index  was flat, with Ajman Bank rising 1.9 percent. UAE's central bank approved cash dividends of 3.5 percent of its capital.

Insurer Takaful Emarat rose 1.3 percent, with the company proposing a full-year cash dividend of 7 percent of its paid-up capital.

Dubai's index is up 4.5 percent this year, lifted by strong fourth-quarter results at real estate companies, though an expected weakness in property prices is capping gains.

Although Dubai was one of the worst-performing markets globally last year, fund managers expressed optimism in the UAE. More than half of 11 fund managers in a Reuters poll last month said they would increase allocations to the country. 

Abu Dhabi's index  slid 0.4 percent, weighed downj by financial stocks.

Ras Al Khaimah Poultry and Feeding plunged 7.9 percent while Sharjah Islamic Bank lost 5.8 percent.

The Qatar index edged up by 0.1 percent as Mesaieed Petrochemical rose 2.8 percent and Qatar Gas Transport gained 2.3 percent.

Qatar's exchange, which jumped 21 percent in 2018, was one of the world's best-performing markets for the year after limits were lifted on foreign share ownership.

But the index has experienced a spate of selling this month, with investors looking to allocate money to other regional markets that offer better valuations.

Egypt's blue-chip index was flat, with Oriental Weavers slumping 5.1 percent after a drop in its fourth-quarter net profit and sales.

But Talaat Mostafa Group climbed 2.5 percent after reporting real estate sales of 3.2 billion Egyptian pounds ($183.07 million) in the first two months of the year, against 1.5 billion pounds a year ago.

($1 = 17.4800 Egyptian pounds)

(Reporting by Abinaya Vijayaraghavan in Bengaluru Editing by David Goodman) ((abinaya.vijayaraghavan@thomsonreuters.com; within U.S.+1 646 223 8780; outside U.S. +91 80 6749 2733; Reuters Messaging: abinaya.vijayaraghavan.thomsonreuters.com@reuters.net))

More From Markets