Shares in Saudi Arabia dropped the most in more than eight weeks, led by banking stocks, after some investors capitalized on gains as the Arab world’s biggest bourse prepares to open to foreigners.
The Tadawul All Share Index declined 0.6 percent, the most since June 29, to close at 10,842.78. The benchmark measure has advanced 11 percent since the country announced plans to allow investors outside the Gulf Cooperation Council to access the bourse. Bank Albilad tumbled 4.6 percent, the most since March 17. Alinma Bank erased an increase of 9.5 percent to close 1.7 percent lower as more than 120 million shares changed hands, accounting for about a quarter of all shares traded.
“Retail investors are heavily invested in Alinma Bank,” said Khaled Albraikan, head of asset management in Riyadh at NCB Capital. “When there’s profit-taking in a stock that has been rallying,” it affects the whole market, he said. Alinma Bank advanced 21 percent in the six days through yesterday.
Saudi Arabia’s market regulator last week outlined shareholder limits for foreign investors as it prepares to open one of the world’s most restricted markets. The benchmark index is one of the best-performing in the world this year in dollar terms, according to data compiled by Bloomberg, and closed at the highest in six years yesterday.
The Tadawul’s 14-day relative strength index fell to 84, from 92 yesterday, the data show. A level above 70 indicates to some analysts that securities are overbought and poised to decline. Bank Albilad dropped to 50.45 riyals, while Alinma Bank retreated to 24.97 riyals.
Saudi Arabia’s bourse may be added to MSCI Inc.’s emerging-markets gauge by 2017 at the earliest, Sebastien Lieblich, executive director at MSCI Index Research, said in July. That may translate into about $35 billion to $40 billion of inflows, John Burbank, founder of Passport Capital LLC, wrote in an e-mail on Aug. 21.