Stock markets in the Middle East diverged to an unusual degree on Sunday, with Saudi Arabia and Egypt falling close to multi-year lows while other major Gulf bourses edged up.
Saudi Arabia’s Tadawul All-Share Index rose in early trade but closed 1.8 percent lower at 5,558 points in extremely volatile trade. It has important technical support at January’s low of 5,349 points.
“The oscillation in trading activity points to bearish technicals and to investors’ nerves — they are now worried about rising geopolitical tensions,” said a Riyadh-based portfolio manager.
While the improved global environment supported other Gulf markets, local traders in Saudi Arabia dumped small and mid-cap stocks with the insurance sub-sector index, a focus of short-term investors, dropping 5.3 percent.
Al-Tayyar Travel tumbled 9.4 percent. The firm said in a statement it had bought a 33.3 percent stake in online shopping website Wadi.com for SR125.6 million ($33.5 million), and that it would finance the purchase from retained earnings. Wadi.com said that in total, it raised $67 million in the Middle East tech sector’s largest Series A funding.
Markets in the UAE and Qatar, which are believed to have stronger state finances than Saudi Arabia and much more room than Egypt to keep their economies growing with fiscal spending, fared better.
Dubai’s index rose 1.0 percent to 3,011 points, recovering some of its 2.6 percent loss on Thursday, though it closed 31 points below its intra-day high. Developer Emaar Properties added 1.7 percent but DAMAC Properties fell 1.2 percent after trading up as much as 2.5 percent.
Drake & Scull closed 1.2 percent higher after the construction company posted a quarterly net profit of AED14.7 million ($4 million); an analyst at SICO Bahrain had forecast a net loss of AED38.6 million. The stock rose as much as 7.1 percent intra-day.
In Abu Dhabi, the benchmark edged up 0.1 percent in modest volume with RAK Properties and Dana Gas, two of the most heavily traded stocks, advancing 5.6 and 2.0 percent respectively. But blue chip National Bank of Abu Dhabi fell 2.7 percent.
Doha’s index rose 1.2 percent, cutting its losses to 7.6 percent in 2016.
Gulf International Services, the oil drilling rig provider, was the most heavily traded stock; it jumped 6.0 percent in heavy trade.
Source: Arab News