Makkah Construction & Development Co. (MCDCO) soared to the highest level in almost seven years as expansion projects around the Grand Mosque in the holy city of Mecca helped extend a rally in Saudi real-estate shares.
The Saudi Arabian company, which is based in Mecca, jumped 7.1 percent to 75.25 riyals, the highest since October 2006, at the close in Riyadh as volume surged to 2.55 million shares, 7.3 times the three-month daily average. The stock was the third-biggest gainer on the benchmark Tadawul All Share Index, which rose 0.8 percent.
Shares of Makkah Construction have rallied 85 percent this year, outpacing Tadawul’s 11 percent gain, as the kingdom presses ahead with plans to increase the holy city’s ability to handle pilgrims who flock to Saudi Arabia each year for Hajj. The plans include an expansion of the Grand Mosque to enable it to accommodate two million people, state-owned Saudi Press Agency reported on June 15.
“The Grand Mosque in Mecca and the area surrounding it are undergoing massive expansion,” Turki Fadaak, head of research and consultancy at Albilad Investment Co., said by e-mail. “Makkah Construction & Development has increased this year, supported by these expansion plans.”
Makkah Construction owns a 10 percent stake in Jabal Omar Development Co. (JOMAR), whose shares have rallied 49 percent in 2013 amid plans by the company to open 10 hotel towers in the holy city this year to accommodate pilgrims.
More than 10 million people descend on Mecca throughout the year and about three million pilgrims attend the annual Hajj, the Islamic journey every able-bodied Muslim is obligated to make. Jabal Omar shares climbed 1.4 percent today, while the Tadawul All Share Real Estate Development Industries Index rose 2.4 percent, taking this year’s advance to 38 percent.
Saudi Arabian authorities have asked local and foreign pilgrims to postpone Hajj plans this year due to expansion works at the Grand Mosque in Mecca to avoid congestion and stampedes.
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