08/03/2011
Saudi banks in late surge; most Gulf markets resume slide
Saudi banks made a late surge yesterday to help the kingdom’s benchmark rally for a third day, but most Middle East markets fell, resuming declines as regional political worries weighed. The banking index ended 5.5% higher, having been down 1.7% intraday. Riyadh Bank and Banque Saudi Fransi gained about 10% each.
“This has to be speculation the mortgage law will come in very soon,” says a Riyadh fund manager who asked not to be identified.
A mortgage law, in planning for almost a decade, will come in soon, the chairman of Saudi Arabia’s Shoura Council said in an online report on late Sunday.
Saudi Arabia’s index climbed 3.3% to trim its 2011 losses to 10.1%, with state-linked funds likely to remain buyers. These funds had targeted petrochemicals stocks in previous sessions.
Dubai’s measure fell 1% to 1,375 points. Abu Dhabi’s benchmark dropped 0.4% to 2,549 points.
Oman’s index fell 1.8% to 6,288 points. Kuwait’s benchmark dropped 0.9% to 6,135 points. Bahrain’s measure edged up 0.1% to 1,397 points.
Saudi Basic Industries Corp (Sabic) rose 2.7% and has made double digit gains since Thursday’s six-month low, while other petrochemicals’ shares are also up.
“The tendency is to compare to oil prices to petrochemicals producers’ shares and their performance has diverged,” said Walid Shihabi, Shuaa Securities chief.
“There’s a strong case for this to narrow. Petrochemicals are on track to have a strong quarter in terms of profitability, but people with a longer-term perspective will be worried about the impact of higher prices on demand.”
Dubai’s benchmark, heavily skewed towards property-related stocks, is down 78% from a 2008 peak.
