Saudi shares rise ahead of FTSE Russell index move

Gains on the Tadawul main index on Sunday were led by financial stocks. (Reuters)
Updated 03 March 2019

Saudi shares rise ahead of FTSE Russell index move

  • Tadawul gears up for inclusion in emerging market benchmarks
  • Stock exchange expects passive fund inflows of up to $20 billion this year


DUBAI: Saudi stocks ended higher on Sunday, helped by optimism over more fund inflows ahead of inclusion on FTSE Russell’s emerging market index in about two weeks.

The Tadawul main index was up 0.5 percent, led by financial stocks. Samba Financial Group rose 1.1 percent and Al Rajhi Bank climbed 0.4 percent.

Al Tayyar Travel Group surged 5.7 percent as investors went past its full-year loss in 2018 to take comfort from its plans to raise SR3 billion ($800 million) in fresh capital.

One trader, who asked not to be named, said speculation around a possible takeover of Dubai-based ride-hailing firm Careem by Uber Technologies is also fueling gains in Al Tayyar’s stocks given the company’s minority stake in Careem. 

Saudi Arabia’s stock exchange, the Gulf’s biggest market, expects passive fund inflows of $15 to $20 billion this year as it gears up for inclusion in emerging market benchmarks, its chief executive told Reuters on Thursday.

“The first phase of FTSE inclusion should drive in 10 percent of the estimated total $6 billion in passive flows into the Saudi market,” said Vrajesh Bhandari, a senior portfolio manager at Al Mal Capital.

He said bigger moves are expected when the global index provider MSCI adds Saudi stocks to its global benchmark in two tranches in May and August, however he cautioned that the Saudi market’s valuation appears rich.

The Saudi index has gained about 9 percent so far this year, outperforming its Gulf peers, trading at nearly 17 times price-to-earnings ratio.

Bhandari said the Saudi market’s rise may be capped by a slower earnings growth profile compared to other emerging markets.

Saudi stocks will be the largest Middle East portion of the FTSE Emerging Index, with an overall weighting of 2.7 percent, according to the index-compiler FTSE Russell.

The inclusion will happen in several tranches and will be completed by December this year. The first 25 percent tranche will be added starting March 18, according to the FTSE Russell document.

Dubai stocks were up 0.25 percent, rebounding from a selloff on Friday when profit-taking set in after a sharp rally in property stocks following strong fourth-quarter earnings of companies linked to Emaar Properties. Shares of Damac Properties surged 5.8 percent and Emaar Malls rose 1.7 percent.

Although the Dubai index has rallied this year, led by strong fourth-quarter results at real estate firms, an expected further fall in property prices is capping gains.

The Kuwaiti index gained 0.8 percent, fueled by gains in banking stocks. Burgan Bank ended 1.9 percent higher after recently posting a rise in quarterly earnings. Kuwait Finance House rose nearly 1 percent.

Egyptian stocks, which have been the best-performing stocks in the Middle East this year with gains of 13.7 percent, ended 0.2 percent higher on Sunday led by financials.

Bigger gains were capped by selling in Global Telecom Holding, which dropped 1.7 percent.

The stock has been volatile since Amsterdam-based Veon Holdings, an existing shareholder, recently submitted a mandatory takeover offer for the firm.

China’s crude oil imports from Saudi Arabia up 43%

Updated 25 May 2019

China’s crude oil imports from Saudi Arabia up 43%

  • Imports grew to 1.53 million barrels per day compared with 1.07 million a year ago
  • Sinopec Group and China National Petroleum Corp., the country’s top state-owned refiners, are halting Iranian oil purchases for loading in May, three people with knowledge of the matter said

BEIJING: China’s crude oil imports from Saudi Arabia rose 43 percent in April, making the Middle Eastern OPEC kingpin once again the top supplier to the world’s second-biggest economy, boosted by demand from new private refiners.
Saudi imports grew to 6.30 million tons, or 1.53 million barrels per day (bpd) on a daily basis, compared with 1.07 million bpd in the year ago period, according to data from the General Administration of Customs released on Saturday.
Saudi shipments were supported by higher refinery run rates at Hengli Petrochemical Co. Ltd, with production at the 400,000 bpd-capacity refinery in northeast China expected to reach optimal levels in late June. About 70 percent of the feedstock for Hengli came from Saudi Arabia.
Meanwhile Russian supplies were 6.12 million tons, or 1.49 million bpd, up from 1.35 million bpd in April last year.
China in April imported 3.24 million tons of crude oil from Iran, or 789,137 bpd, up from March’s 541,100 bpd, as companies ramped up buying before the scrapping of sanctions waivers the US had granted to big buyers of Iranian oil.
China Petrochemical Corp. (Sinopec Group) and China National Petroleum Corp. (CNPC), the country’s top state-owned refiners, are halting Iranian oil purchases for loading in May, three people with knowledge of the matter said.
Venezuela shipments stood at 1.9 million tons, or 462,813 bpd in April, up 85 percent versus 249,700 bpd in March, while crude imports from Iraq were 3.31 million tons, or 806,372 bpd, down from 904,500 bpd the previous month.