Saudi Stocks Jump as Phone Company Details 3-Year Dividend PlanBy
Kingdom's bourse increases the most among major indexes
Saudi Telecom posts biggest jump since November 2008
Saudi Arabian stocks rallied the most in the world, led by the country’s biggest telecommunications company after it gave a three-year pledge on dividends.
The Tadawul All Share Index advanced 2 percent at the close, the most in more than two months, as shares in Saudi Telecom Co. had their biggest jump since November 2008. The state-controlled company said it would adopt a one-riyal-per-share fixed quarterly dividend for the period, according to a statement to the Saudi bourse on Wednesday.
Saudi Arabia’s stock market, which in June opened to direct foreign investors for the first time, has dropped by more than a quarter in the past 12 months amid a collapse in oil prices. Standard & Poor’s cut the kingdom’s credit rating last month, citing a budget deficit that it forecasts will increase to 16 percent of gross domestic product this year.
“The positive news from Saudi Telecom, with a clear guidance of their future dividends, is giving investors comfort,” said Tariq Qaqish, the head of asset management at Dubai-based Al Mal Capital PSC. The Saudi market is driven mainly by retail investors and was at “an extremely oversold level,” he said.
The Riyadh-based phone operator surged 9.8 percent Wednesday to the highest in more than two weeks. Al Rajhi Bank, the lender with the biggest weighting on the Tadawul, rose 2.9 percent, the most in a week. Banque Saudi Fransi gained 5.3 percent, the most since Aug. 25.
The Tadawul’s 14-day relative-strength index fell below 30 last week, a sign to some technical analysts a gauge may be poised to rebound. It has since climbed to 43.
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