Saudi Arabian stocks rose the most in four months after the kingdom said foreigners will be able to access its stock market directly from mid-June and as Saudi Basic Industries Corp.’s profit beat estimates. Dubai shares fell.
The Tadawul All Share Index climbed 4 percent, the most since Dec. 18, to close at 9,619.97. The Capital Market Authority on Thursday said it will publish investment rules on May 4, which will be enacted on June 1, and foreigners can start trading on June 15. Saudi Basic, the world’s biggest global petrochemical manufacturer by sales known as Sabic, soared 9.8 percent. Riyadh-based Al Rajhi Bank climbed 3.8 percent.
“It’s a big boost for investors as it puts CMA plans beyond doubt about opening the market to foreign investment,” Mohammed Al-Suwayed, a Riyadh-based financial analyst and partner at market-analytics company SPT Investors LLC, said by phone. “Sabic is helping the matters today with first-quarter numbers.”
The world’s biggest oil exporter is giving foreigners access to its $535 billion stock market as the country pursues a $130 billion spending plan to boost non-energy industries. Income from oil accounted for almost 90 percent of Saudi Arabia’s revenue last year. Investors from outside the six-nation Gulf Cooperation Council currently access shares in the kingdom through equity swaps and exchange-traded funds.
The announcement opens up “possibilities for the market to touch new highs and we could see an uptrend all the way possibly to the 12,000 level by the end of this year,” Al-Suwayed said.
Sabic reported first-quarter profit of 3.93 billion riyals ($1.05 billion) compared with the 3.28 billion-riyal mean estimate of seven analysts compiled by Bloomberg. The company rose the most in almost five years to 95.75 riyals. Rajhi, the lender with the biggest weighting on the kingdom’s index, increased to 63.03 riyals.
In Dubai, the DFM General Index swung between gains and losses before closing 1.4 percent lower as investors weighed a global equities rout last week against regional optimism over Saudi Arabia’s timeline to open its market to foreigners.
“Global markets have taken a battering on the weekend and a lot of negative sentiment has to do with that,” Ahmed Shehada, the head of advisory and institutions at NBAD Securities LLC, said by phone from Abu Dhabi. The market opening in Saudi Arabia being “on track is a great news for regional and international investors” on the other hand, Shehada said.
Global equities slumped after Chinese regulators curbed margin trading in markets that have led stock advances in the past year. The Standard & Poor’s 500 Index and the Dow Jones Industrial Average fell the most since March 25 as the cost of living in the U.S. excluding food and fuel in March signaled inflation is starting to firm as Federal Reserve officials debate the timing of raising borrowing costs.
Monetary policies in the six-nation Gulf Cooperation Council, where most currencies are pegged to the dollar, are influenced by Fed decisions.
Emaar Properties PJSC, the developer of Burj Khalifa, the world’s tallest tower in Dubai, slumped the most in more than three weeks even after the shareholders of its home mortgage unit Amlak Finance PJSC approved re-admission to the Dubai bourse. Amlak, a Shariah-compliant financier in which Emaar holds a 45 percent stake, was suspended from trading in November 2008.
Arabtec Holding Co., the biggest publicly-traded construction company in the United Arab Emirates, decreased the most since April 13 after Chairman Khadem Al Qubaisi and founder Riad Kamal’s names were omitted from a list of nominees for the board.
Qatar’s QE Index and Abu Dhabi’s benchmark ADX General Index declined 0.7 percent each. Egypt’s EGX 30 Index retreated 1.4 percent and Bahrain’s BB All Share Index slid 0.2 percent. Kuwait’s benchmark SE Price Index climbed 0.7 percent and Oman’s MSM 30 Index increased 0.3 percent.
Israel’s TA-25 Index dropped 0.9 percent at 3:43 p.m. local time, headed for the biggest loss since March 26. Teva Pharmaceutical Industries Ltd. led the decline with a 4.9 percent slump. Perrigo Co. slid 2.2 percent.
“The market is tracking global equities, plus Teva and Perrigo shares, which make up some 20 percent of the index, are down in reaction to reports that Teva is considering buying Mylan,” Adi Babani, a trader at Bank of Jerusalem Ltd., said by phone from Tel Aviv.
Mylan NV this month made an unsolicited $28.9 billion bid for Perrigo Co., which many see as a trigger for Teva to pursue Mylan. Teva is exploring a takeover offer for Mylan, people with knowledge of the matter said this month, in a move that would create a global generic-drug giant.
The yield on the country’s benchmark government bond due March 2024 dropped two basis points to 1.42 percent.