JEDDAH: Saudi Arabia’s stock market gained Thursday for a second straight week.

The Tadawul All-Share Index rose 1.2 percent, taking its gains for the week to 2.1 percent as gainers outnumbered losers 147 to 12. The government’s $17.5 billion international bond issue last month eased concern about tight banking system liquidity.

Banking shares remained strong, with 11 of 12 traded lenders climbing. Mid-sized lender Bank Aljazira climbed 2.2 percent.

Also Thursday, the Capital Market Authority issued draft rules for a new secondary market, part of efforts to boost the role of small and medium enterprises in the economy.

Only Saudi joint stock companies are eligible and must have been operating for one year, said the proposed rules issued by the CMA.

There must also be at least 50 public shareholders, say the rules, which are open for public comment until November 14.

Businessmen and analysts in the Kingdom say Saudi Arabia has avoided an economic crisis due to low oil prices this year but the outlook for state finances and growth is likely to remain murky for many months to come,

Six months after the government launched its most radical economic reforms in decades, it has scored several victories.

Drastic spending cuts seem to be reducing its budget deficit, which totalled a record SR367 billion ($98 billion) last year, by much more than originally planned.

A $17.5 billion sovereign bond issue last month opened an overseas borrowing channel which Riyadh can use to slow the drawdown of its foreign reserves, buying more time to adjust its economy to an era of cheap oil, and for the foreseeable future almost eliminating the risk of a currency devaluation.

The government has accomplished this without any significant political backlash.

While ordinary people grumble at the austerity on social media, many say they understand the need for it, and businessmen praise the authorities’ decisiveness.

A foreign banker in Riyadh said the economy had escaped a fiscal and currency crisis that loomed at the start of 2016.

Central bank data shows no sign of rising capital flight from the country, he noted.

“But this does not mean the basic problems are solved,” he said. “Next year will be a very tough year.”

Bankers in contact with Saudi economic officials expect the 2016 budget deficit, which will be revealed when the government announces its 2017 budget plan in late December, to come in well below Riyadh’s original projection of SR326 billion.

Mazen Al-Sudairi, head of research at local firm Al-Istithmar Capital, predicted a deficit of SR190 billion; Jadwa Investment, a leading investment bank, forecasts SR265 billion. Such a figure would allow Riyadh to claim major progress in its effort to eliminate the deficit by 2020.

In Dubai, the stock index closed up 0.2 percent Thursday, with small and mid-cap shares the chief gainers. Gulf Navigation jumped 7.0 percent and lender Mashreq bank surged 6.2 percent.

But Qatar’s stock index sank 1.2 percent to 9,956 points after slipping 1.3 percent on Wednesday, when it broke technical support at 10,153-10,160 points, where the September low coincided with the 200-day average.

Telecommunications firm Ooredoo retreated 3.2 percent and Qatar National Bank lost 2.1 percent.

Fund managers have expressed concern about high valuations in Qatar and a Reuters poll published this week found them on balance expecting to cut allocations to that market in the next three months.