According to Reuters, Middle East markets were mixed, with investors cautious as they await further developments in Egypt.
Zain Saudi climbed 2.58 percent to SR7.95 — its highest finish since Jan. 15.
Yet traders hoping for a stake sale windfall may be disappointed. Analysts expect Kingdom Holding’s offer to be priced at a steep discount to Zain Saudi's share price because of the operator's debts, mounting losses and stiff competition in the local telecoms sector. Kingdom Holding surged 9.4 percent.
Samba Financial Group climbed 1.29 percent and SABB added 2.73 percent, helping the banking index edge higher.
Many analysts are bullish about Saudi banks, predicting lending will rise along with government spending, but Youssef Kassantini, a Saudi-based financial analyst, warned unrest in Egypt may dampen the Kingdom's banking activity.
"Some investors that were going to borrow money are likely to hold off and see what happens in Egypt, especially if they are exposed to the country," said Kassantini. "Bank growth will be limited, but we'll probably see better numbers in Q2."
Hundreds of thousands of Saudis live in Egypt, Kassantini said, and others have also invested heavily in their North African neighbor, with multibillion dollar annual trade between the two countries.
The Tadawul All-Share Index (TASI) rose 0.48 percent to 6,616.41 points, trimming its losses to 1.2 percent since Jan. 26, when protests in Egypt sent Saudi stocks tumbling. The sector activity for the day was all positive except 2 losing sectors. The gaining sectors ranged from 0.13 percent by the Transport sector to 3.41 percent by the Multi-Investment sector. On the other hand the losing sectors for the day were the cement sector with 0.55 percent and the Media and Publishing sector with 0.88 percent. The overall market breadth for the day was positive with 133 advancers against 8 decliners giving it an AD ratio of 16.6, the Financial Transaction House (FTH) — licensed by the Capital Market Authority (CMA) — said in its daily market commentary.
The liquidity for the day reached SR3.21 billion.
Retail investors have led sellers, with institutions among the biggest buyers, indicating the latter were less worried about a potential Egypt contagion, Reuters said.
"The market has rebounded, but we're still affected by the Egypt situation and I doubt the index will move much higher for now - trading will be sideways," added Kassantini.
Qatari Islamic bank Masraf Al-Rayan climbed 3.6 percent to a 32-month high, extending gains since the central bank told commercial lenders to end their Islamic operations.
Qatar Islamic Bank and Qatar International Islamic Bank fell 0.8 and 1.8 percent respectively as investors booked profits from a Sunday surge.
Conventional lenders have until Dec. 31 to dispose of their Islamic banking operations.
"The Qatar bank ruling was shocking, not so much the decision itself, but the fact it was unexpected," said Mohammed Yasin, CAPM Investment chief investment officer.
"It might have negative repercussions, because foreign investors don't like surprises that could affect their investment strategy and so may choose to lower their exposure to Qatar. I expect selling pressure in Qatar to continue."
Doha Bank, which said it does no expect a big hit from the central bank ruling, dropped 1 percent.
The Qatari index slipped 0.2 percent to 8,876 points.
The Dubai index edged up 0.03 percent to 1,606 points. The Abu Dhabi index climbed 0.7 percent to 2,693 points.
The Kuwaiti index fell 0.2 percent to 6,734 points.
The Omani index rose 0.1 percent to 6,893 points.
The Bahraini index climbed 1.5 percent to 1,473 points.
