Egypt's Curative Organisation, VACSERA sign deal to boost health, vaccine cooperation    Oil prices jump 3% on Thursday    Gold prices edge lower on Thursday    Egypt, EU sign €4b deal for second phase of macro-financial assistance    Egypt's East Port Said receives Qatari aid shipments for Gaza    Egypt joins EU's €95b Horizon Europe research, innovation programme    Asian stocks fall on Thursday    Egypt steps up oversight of medical supplies in North Sinai    Egypt to issue commemorative coins ahead of Grand Egyptian Museum opening    Suez Canal signs $2bn first-phase deal to build petrochemical complex in Ain Sokhna    Inaugural EU-Egypt summit focuses on investment, Gaza and migration    Egypt, Sudan discuss boosting health cooperation, supporting Sudan's medical system    Omar Hisham announces launch of Egyptian junior and ladies' golf with 100 players from 15 nations    Egypt records 18 new oil, gas discoveries since July; 13 integrated into production map: Petroleum Minister    Defying US tariffs, China's industrial heartland shows resilience    Pakistan, Afghanistan ceasefire holds as focus shifts to Istanbul talks    Egypt's non-oil exports jump 21% to $36.6bn in 9M 2025: El-Khatib    Egypt, France agree to boost humanitarian aid, rebuild Gaza's health sector    Egyptian junior and ladies' golf open to be held in New Giza, offers EGP 1m in prizes    The Survivors of Nothingness — Part Two    Health Minister reviews readiness of Minya for rollout of universal health insurance    Egypt's PM reviews efforts to remove Nile River encroachments    Egypt launches official website for Grand Egyptian Museum ahead of November opening    The Survivors of Nothingness — Episode (I)    Al-Sisi: Cairo to host Gaza reconstruction conference in November    Egypt successfully hosts Egyptian Amateur Open golf championship with 19-nation turnout    Egypt will never relinquish historical Nile water rights, PM says    Al Ismaelia launches award-winning 'TamaraHaus' in Downtown Cairo revival    Al-Sisi, Burhan discuss efforts to end Sudan war, address Nile Dam dispute in Cairo talks    Egypt's Sisi warns against unilateral Nile actions, calls for global water cooperation    Egypt unearths New Kingdom military fortress on Horus's Way in Sinai    Syria releases preliminary results of first post-Assad parliament vote    Karnak's hidden origins: Study reveals Egypt's great temple rose from ancient Nile island    Egypt resolves dispute between top African sports bodies ahead of 2027 African Games    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Russia says it's in sync with US, China, Pakistan on Taliban    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







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Saudi Arabia surges ahead of market opening to foreigners
Published in Ahram Online on 19 - 04 - 2015

Saudi Arabia's bourse surged on Sunday after the kingdom's securities regulator said it would open the market to direct foreign investment from June 15, while many other markets in the Middle East were weak.
The main Saudi index rose 4.0 percent, its biggest gain this year, to 9,620 points on its highest volume in 11 months. It broke minor technical resistance at the late March high of 9,377 points and stood above the 200-day average, now at 9,572 points.
It has not stayed above the average on a sustained basis since last November; a clean break above it would be longer-term bullish technically.
The kingdom announced last July that it would permit direct foreign purchases of shares in the first half of 2015, as a way to expose companies to market discipline, diversify the economy beyond oil and create jobs.
The Capital Market Authority announced after the close on Thursday that qualified foreign institutions would be able buy shares from mid-June and that the final rules covering this would be published on May 4. Up to now, foreigners have been restricted to buying Saudi shares indirectly through swaps or exchange-traded funds.
Fresh fund flows into Saudi Arabia in the initial months may be moderate - perhaps only hundreds of millions of dollars a month - partly because share valuations are currently quite high. Saudi Arabia's forward price-to-earnings ratio of 16.2 is on a par with those of the Dow Jones Industrial Average and FTSE 100, and well above other Gulf markets.
But the announcement nevertheless buoyed investor sentiment, as the market opening is likely to start the process of incorporating Saudi Arabia into major equity indexes such as those run by MSCI, which will eventually attract tens of billions of dollars.
Saudi Basic Industries Corp (SABIC), which is expected to be a major target of foreign investors as the country's biggest listed firm, surged its daily 10 percent limit on Sunday. It reported a 39 percent drop in first-quarter net income on Sunday that was not as large a fall as analysts had forecast.
SABIC made a net profit of 3.93 billion riyals ($1.05 billion); analysts polled by Reuters had predicted, on average, that SABIC would make 3.50 billion riyals. Low oil and petrochemical prices dragged down its revenues.
Shares in several other petrochemical firms such as Saudi Kayan, Yanbu National and Saudi Industrial Investment Group also rose their daily 10 percent limits on Sunday.
Banking heavyweights Al Rajhi and National Commercial Bank jumped 3.7 and 3.4 percent respectively.
UAE, EGYPT
Several other Gulf markets fell as the United Arab Emirates and Qatar pulled back after a few strong sessions. Dubai's index fell 1.4 percent after surging 8.1 percent in the three previous sessions, though property developer DAMAC extended gains in its highest daily trading volume on record.
The stock, which listed in Dubai in January, surged as much as 7.2 percent during the day, hitting a new all-time high of 3.11 dirhams. But it gave up most of those gains and closed just 2.1 percent higher at 2.96 dirhams.
DAMAC's board will discuss the company's dividend distribution policy, along with first-quarter results, at a meeting on April 21. The firm paid no cash dividend for 2014 but issued bonus shares.
Abu Dhabi and Qatar edged down 0.7 percent each in broad declines. Kuwait added 0.7 percent and Oman's bourse inched up 0.05 percent.
Some Gulf investors may be cashing out of the UAE and Qatar in order to invest in Saudi Arabia's bourse. According to Doha bourse data, for instance, Gulf investors sold almost twice as many stocks as they bought on Sunday.
Unlike other foreigners, Gulf investors can already trade Saudi stocks freely, so they may try to profit from front-running foreigners, as they did in the UAE and Qatar last year when the two countries were upgraded to emerging market status by major index compilers.
Egypt's bourse fell 1.4 percent and Juhayna Food Industries was the biggest loser, tumbling 5.4 percent. Egypt is considering a 20 percent tariff on white sugar imports as it bolsters its own sugar industry with a subsidised export push, a ministerial statement and a filing at the World Trade Organization said on Thursday.
In the short term at least, the move would probably hurt local food makers which use sugar as a key ingredient.
Most other Egyptian stocks were also weak but El Arabia For Investment & Development rose 6.5 percent after last Thursday asking its shareholders to approve the sale of its subsidiary Cairo for Development and Car Manufacturing to a strategic investor at a meeting on April 25. It did not disclose the price of the potential deal.
According to Prime Holding brokerage, the unit is the exclusive agent for the Peugeot car brand in Egypt.
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