30/08/2010
Saudi stocks climb on oil price and IMF comments
Saudi stocks rose on Sunday, boosted by higher oil prices and positive IMF comments on the Kingdom’s economy, while Abu Dhabi’s Aldar Properties extended its gains. Other Middle East markets were mixed but continued to trade range-bound, against a backdrop of rising global markets and higher oil prices.
The Tadawul All-Share Index (TASI) continued its positive movement and gained 30.13 points, up 0.5 percent to close at 6,085 points for the day. The sector activity for the day was mixed with 8 gaining sectors against 7 losing sectors.
The gaining sectors ranged from 0.16 percent by the retail sector to 1.10 percent by the petrochemical industries sector. On the other hand the losing sectors for the day ranged from -0.01 percent by the Industrial Investment sector to -1.01 percent by the Agriculture & Food Industries sector. The overall market breadth for the day was positive with 60 advancers against 58 decliners giving it an AD ratio of 1.03.
Saudi Arabia’s outlook is positive as it confronted the global financial crisis in an adequate manner, the International Monetary Fund said on Friday. It noted gross domestic product not related to oil would likely grow 4.5 percent this year. The fund’s executive board also said the country’s banking system is fundamentally sound, and the credit outlook has recently improved. But the board, which had bilateral discussions with Saudi Arabia in July, said “vulnerabilities remain, especially from the volatility of oil prices.” US oil prices rose a third straight session on Friday, with some sources pointing to short covering ahead of the weekend with three tropical storms brewing in the Atlantic Ocean. “The IMF’s estimates and outlook are broadly in line with ours, with the domestic environment continuing to benefit from an expansionary fiscal stance and, to a lesser degree, a pickup in credit,” said Monica Malik at EFG Hermes in a research note.
Bellwether Saudi Basic Industries (SABIC) gained 0.6 percent whileDeveloper Aldar ended at 2.28 dirhams, taking its gains to 12.3 percent since slumping to an 18-month low on Aug. 12. Trading in the stock accounted for half of the shares changing hands in Abu Dhabi on Sunday.
Standard and Poors and Moody’s have both downgraded Aldar recently, citing a lack of implicit government backing. This has weighed on shares and bonds, but increasing market talk some sort of state support might be imminent helped the share gain.
Aldar’s gain helped Abu Dhabi’s benchmark rise 0.3 percent.
Oman’s index edged 0.04 percent lower to 6,270 points. “The market remains very quiet today, ignoring the positive global cues,” said Gunjan Gupta, head of research at Oman Arab Bank. “It seems investors are waiting for any uptrend to sell. We believe current price levels of few stocks like National Bank of Oman and Al Anwar Ceramic give a good buying opportunity,” she added.
Qatar’s benchmark rose 0.5 percent to 7,196 points and Bahrain’s index slipped 0.1 percent to 1,431 points.
