Banks boost Saudi stock market, Qatar hit by sell-off

The Saudi index increased 1.66 percent, with Al Rajhi Bank adding 2.2 percent and Saudi Basic Industries up 3.3 percent. (Reuters)
Updated 21 May 2019

Banks boost Saudi stock market, Qatar hit by sell-off

  • MSCI last week said it would include MSCI Saudi Arabia in its emerging-markets index
  • Qatar’s index was down 2 percent, with 17 of its 20 stocks sliding

BENGALURU: Saudi Arabia’s stock market rose sharply on Tuesday, leading gains in most major Gulf bourses amid a global rally after Washington temporarily eased trade restrictions imposed last week on China’s Huawei. Qatar dropped due to a wide sell-off.
The Saudi index increased 1.66 percent, with Al Rajhi Bank adding 2.2 percent and Saudi Basic Industries up 3.3 percent.
The “Middle East today is following the positive lead from global markets. Local sentiment is also better as evidenced by the strong moves in small cap stocks,” said Vrajesh Bhandari, senior portfolio manager at Al Mal Capital.
“We expect Saudi Arabia to continue its upward trend until at least the MSCI effective date May 28,” added Vrajesh. “Thereafter, investors need to be selective and follow a bottom up-approach. Overall, we find better value in UAE and Egypt.”
MSCI last week said it would include MSCI Saudi Arabia in its emerging-markets index, effective May 28, a move that could draw billions of dollars into the market.
Saudi International Petrochemical closed 3.4 percent higher. The firm completed the merger of equals with Sahara Petrochemical, which delisted on May 20.
Qatar’s index was down 2 percent, with 17 of its 20 stocks sliding.

The Middle East’s largest lender, Qatar National Bank, dropped 2.4 percent, while Mesaieed Petrochemical Holding plunged 10 percent, snapping a six-day winning streak triggered by the stock inclusion in MSCI’s index.
Egypt’s blue-chip index gained 1.7 percent as most of its stocks rose, with Market heavyweight Commercial International Bank gaining 0.9 percent.
El Sewedy Electric jumped 5.9 percent after it partnered with General Authority For Suez Canal Economic Zone to establish a new company with issued capital of 1 billion Egyptian pounds ($58.82 million), in which the firm will own 49 percent.
Abu Dhabi’s index closed 1.1 percent higher, led by a 1.3 percent increase in the country’s largest lender, First Abu Dhabi Bank.
Dana Gas jumped 4.1 percent after the energy firm said it had started drilling operations at Merak-1 well, offshore Egypt.
National Marine Dredging soared 13.9 percent after last week reporting a higher first-quarter earnings.
The Dubai index rose 1 percent as all but one of its real estate stocks rose.
Emaar Properties, Dubai’s largest listed-developer, increased 2.9 percent while its units Emaar Malls and Emaar Development were up 2.3 percent and 3 percent respectively.
The UAE said on Tuesday that it will grant 6,800 foreign investors permanent residency under a new “Golden Card” system after they invested a combined 100 billion dirhams ($27.23 billion) in the Gulf state.
National Cement Company was up 1.7 percent after news it had bought ARM Cement’s Kenyan assets for $50 million.
Arabtec Holding rebounded 2.1 percent, snapping four straight sessions of losses on weak first-quarter earnings.


Saudi defense contractor to invest up to $16 million to further localize services

Updated 18 November 2019

Saudi defense contractor to invest up to $16 million to further localize services

DUBAI: Saudi-based defense contractor Middle East Propulsion Company (MEPC) plans to invest between $13 million and $16 million over the next two years to build test cells for aircraft engines and establish new production lines.
These expansion activities should complement the company’s objective to localize high-tech repairs and combine them in one roof for the Saudi defense ministry, which is a major customer, CEO Abdullah Al-Omari told Arab News.
Instead of sending aircraft engines and engines modules overseas for further servicing, thus take up more time before military assets return to actual service, localization not only cuts the turn-around period but also reduces Saudi government spending for the repairs.
“We have accomplished more than 1,600 engine and engine modules [since 2001, they] have been maintained totally in Saudi Arabia,” Al-Omari said at the sidelines of the Dubai Airshow. “The engines consume 45 percent of what you spend on aircraft.”
The company works on 150 to 160 engines and engine modules every year.
MEPC is the first specialized MRO (maintenance, repair and overhaul) company operating in the Middle East, according to its website. It has invested over $26 million during the previous two years for the localization of its MRO services.
“We used to send these parts to outside, it takes 6 months to 24 months sometimes … in case of the Apache engines, minimum turn around is 24 months,” Al-Omari said, but their localization efforts have greatly improved their capability by cutting the turn-around period to only 150 days.
The speed at which MEPC is able to repair engines and modules, boosts the readiness of Saudi military, Al-Omari added.
The company is in talks with major defense contractors, including Honeywell for the Abrams talks and GE T700 engines, for possible tie-ups to further improve their capability, he said.
“Currently there is a potential with the Kuwait army to provide them with similar services [being delivered to the Saudi defense ministry],” Al-Omari said, and expects that cooperation would start “within the next two years or so.”