Saudi Arabian stocks lift Gulf markets after Eid

Saudi Arabia and Dubai led Gulf stocks higher on Sunday as regional markets resumed trade after last week’s holidays, lifted by positive sentiment on global stocks. (Reuters)
Updated 10 June 2019
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Saudi Arabian stocks lift Gulf markets after Eid

  • The Saudi index rose by 2.2 percent to finish at 8,699 points, its best close since May 9
  • The Dubai index also rose, firming by 1.2 percent as property stocks registered strong gains

DUBAI: Saudi Arabia and Dubai led Gulf stocks higher on Sunday as regional markets resumed trade after last week’s holidays, lifted by positive sentiment on global stocks and expected foreign fund inflows into the Riyadh market.
The Saudi index rose by 2.2 percent to finish at 8,699 points, its best close since May 9.
“The market is bouncing back after the correction experienced in the past few weeks,” said Riyad Capital’s Muhammad Faisal Potrik.
Global stock markets advanced and US Treasury yields tumbled on Friday after a slowdown in job growth fueled hopes of a cut to US interest rates while there were also hints of progress in Washington’s trade battles.
Al Rajhi Bank rose 3.2 percent, Saudi Telecom was up 3.4 percent and Saudi Basic Industries, the index’s biggest stock, gained 2.9 percent.
Late last month the Saudi equity market joined the MSCI Emerging Market index, which is expected to trigger billions of dollars of foreign fund inflows.
A third tranche of the FTSE Russell emerging market index will kick in this month after Saudi stocks were included in two tranches in March and April.
The Dubai index also rose, firming by 1.2 percent as property stocks registered strong gains. Damac Properties was up 9.3 percent and Union Properties rose 4.3 percent. Market heavyweight Emaar Properties was up by a more modest 0.7 percent.
Global Telecom was up 1.5 percent after the company announced it has postponed its shareholder meeting to provide more time for investors to consider the mandatory tender
offer submitted by major share-holder VEON.
Abu Dhabi’s index dropped 0.95 percent, on weakness in First Abu Dhabi Bank, which eased by 1.2 percent.


Saudi Arabia relaxes ownership limits for foreign investors

Updated 26 June 2019
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Saudi Arabia relaxes ownership limits for foreign investors

  • Capital Market Authority chairman, Mohammed El Kuwaiz said, ownership in the Saudi capital market by financial investors had increased threefold this year
  • The move aims to help enhance the market’s efficiency and attractiveness and to expand the institutional investments base

RIYADH,: Saudi Arabia has relaxed a 49% limit for foreign strategic investors in shares of listed companies, aiming to attract billions of dollars of foreign funds as the Kingdom opens up the region’s largest bourse to a more diverse investor base.
The country has introduced a raft of reforms in recent years to make its stock market, the region’s biggest, attractive to foreign investors and issuers.
The move aims to help enhance the market’s efficiency and attractiveness and to expand the institutional investments base, the regulator, the Capital Market Authority (CMA), said in a statement on its website.
The Saudi stock market, which opened to foreign investors in 2015, has seen an upsurge in foreign fund flows since the start of the year due to its inclusion in the emerging markets indexes.
“In the beginning of this year, we had only one percent ownership in the Saudi capital market by financial investors, today it is over three percent, that’s more than a threefold increase,” CMA chairman, Mohammed El-Kuwaiz told Reuters in an interview.
“Our hope is that we can see a similar increase in terms of pace and magnitude as we start to create more avenues for foreign investors to come in to the market,” he added.
There will be no minimum or maximum ownership limit, although the owners must hold the shares for two years before they can sell.
Kuwaiz said huge demand from non-financial foreign investors pushed the CMA to grant approval on an exceptional basis to a number of strategic foreign investors to increase their holdings in Saudi listed companies. These included transactions at an insurance firm and a local bank.
Foreign investors have been net buyers of Saudi equities over the past few months, with purchases worth 51.2 billion riyals ($13.6 billion) until May 30. They currently own 6.6% of Saudi equities, of which 3.15% is owned by strategic foreign investors.
Local shares were incorporated into the FTSE emerging-market index in March and the MSCI emerging market benchmark in May this year. The country’s Tadawul All-Share Index is up 11 percent year-to-date.
Strategic foreign investors can take stakes in listed companies by buying shares directly on the market, or through private transactions and via initial public offerings.
Asked how this move would reflect on the Aramco IPO, planned for 2021, Kuwaiz said it would assure that the market has the physical regulatory and investor infrastructure to accommodate a company as large and as extensive as Saudi Aramco.