Saudi shares up on strong inflows

Dubai : Saudi Arabia’s stock market continued a strong upwards trend yesterday because of inflows of foreign funds and strong corporate earnings, while the rest of the Gulf was lacklustre.

Latest exchange data showed foreigners bought a record $384 million of Saudi Arabian stocks on a net basis last week, anticipating much bigger inflows of funds when Riyadh joins emerging market indexes next year.

The Saudi stock index rose 1.0 per cent yesterday, bringing its gains so far this year to 15pc.

Bank Aljazira was up 5.1pc after Bahrain’s Ahli United Bank said it acquired a 7.3pc stake in the Saudi Islamic lender. Ahli United dropped 1.6pc.

Saudi Telecom rose 1.5pc after it reported first-quarter profit of 2.59 billion riyals ($691 million) versus 2.53 billion riyals last year, broadly in line with analysts’ forecasts.

Another telecommunications firm, Mobily, jumped 4.5pc after it narrowed its first-quarter loss to 93 million riyals from a loss of 163 million riyals a year ago.

Meanwhile, Dubai was weak - partly, fund managers say, because money has been flowing from Dubai to the red-hot Saudi market. The index was down 0.6pc at a fresh two-year closing low.

DAMAC Properties tumbled 7.1pc after the company lowered its annual cash dividend to 15 fils per share from 25 fils.

Abu Dhabi’s index was up 0.2pc on the back of Abu Dhabi National Energy Co, which rocketed 14.6pc in its heaviest trade since last August; it has soared in the past month, partly because of strength in global energy prices.

In Egypt, the index gained 1.0pc as Talaat Mostafa, one of the largest property developers, rose 3.3pc. EFG-Hermes, an investment bank, gained 5.4pc and Qalaa Holdings, an investment firm, rose 5.6pc.

Juhayna Food Industries surged 3.9pc to 13.50 Egyptian pounds after reporting a 38pc year-on-year jump in first-quarter consolidated net profit, on a 20pc rise in sales.

The stock has risen from below 4.0 pounds at the time of the Egyptian pound’s devaluation in November 2016, and by some measures is overvalued, with its 12-month trailing price-earnings ratio at 62 times. Ten analysts covering the stock have a median target price of 10.75 pounds.