Saudi Stocks Spurred by Record Bond Sale Lead Gains Across Gulf

  • Tadawul extends advance after record $17.5 Billion bond sale
  • Dar Al Arkan is kingdom’s most-traded stock following earnings

Saudi Stocks Lead Gulf-Wide Gains

Saudi Arabian stocks led gains across most Gulf equities, rising for a third day on optimism the kingdom will repay companies after it raised a record $17.5 billion from its debut international bond sale.

The Tadawul All Share Index added 1.6 percent on Sunday in Riyadh to close at 5,739.92, the highest level in a month. Dar Al Arkan Real Estate Development Co. was the most-traded stock after it posted an increase in quarterly profit for the first time in a year. Dubai’s DFM General Index added 0.5 percent.

Saudi Arabia, the Arab world’s largest economy, sold the biggest ever foreign bond from an emerging-market nation last week and vowed to increase payments to contractors, sparking a stock rally that boosted the market capitalization of the exchange by about $12 billion. The kingdom’s benchmark index is one of the world’s worst performers this year as the country implements a series of austerity measures to improve its finances after the price of oil, its main source of income, plummeted.

“We’re seeing a general recovery after the events last week,” said Nabil Rantisi, the managing director of Abu Dhabi-based Mena Corp. Financial Services, one of the biggest brokerages in the United Arab Emirates. “There are many stocks that are trading at some good levels that could benefit. Banks, for example, are attractive. Investors are looking for good opportunities now.”

To see Saudi stocks’ dividend yield versus that of emerging-market equities, click here.

National Commercial Bank, whose price-to-earnings ratio dropped to the lowest level since the stock began trading almost two years ago, climbed 2.7 percent and was the second-biggest contributor to the Tadawul’s advance after Jabal Omar Development Company, which rose 3.1 percent.

Dar Al Arkan increased 9.8 percent, the steepest jump since July 2012, as traders exchanged 76 million shares, the most in three months. The Riyadh-based real estate developer posted a 21 percent gain in third-quarter profit to 112.5 million riyals ($30 million), citing an increase in property sales.

The Bloomberg GCC 200 Index, a measure of the largest and most liquid companies in the Gulf Cooperation Council, a group of six nations including Saudi Arabia, climbed 0.7 percent. Abu Dhabi’s ADX General Index added 0.1 percent on trading volumes 62 percent below its six-month average. Kuwait’s SE Price Index advanced 0.2 percent, while Qatar’s QE Index fell less than 0.1 percent. Bahrain’s Bourse All Share Index and Oman’s MSM 30 Index each lost 0.4 percent.

Egypt Pressure

Egypt’s EGX 30 Index was little changed as Cairo-based real estate developer Heliopolis Housing gained 4.9 percent and Egypt Kuwait Holding Co. slipped 2.5 percent. Pressure continues to build on the central bank to devalue the Egyptian pound as a shortage of foreign currency makes basic goods such as sugar scarce.

Qalaa Holdings, which invests in African infrastructure and resources, fell 1.5 percent. The company, which announced on Sunday the sale of its indirect 37 percent stake in ASEC Cement Algeria, traded at about half of its book value. That compares with an average of 1.5 times for companies listed on the benchmark index.

Markets in Israel are closed due to a public holiday.

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