Saudi Arabia led Gulf stocks higher last week as Riyadh eased restrictions on foreign investment in its securities markets, while most other bourses in the region were buoyed by strength in oil prices and global equities at the end of last week.
As previously announced, the Saudi Capital Market Authority lowered minimum qualifications for foreign institutional investors in its markets and raised ceilings on foreign ownership in stocks.
The reforms are not expected to cause a sudden surge of new foreign money into the kingdom; actual foreign ownership of stocks is well below the previous ceilings. Many investors remain deterred by less-than-attractive valuations and a sharp economic slowdown caused by low oil prices.
Nevertheless, the reforms are expected to help stocks in the long term. The main index climbed 1.3 percent on Sunday in a broad-based rise, with petrochemical investment holding company Alujain rising 3.4 percent; before the reforms, foreign institutions directly owned over 4 percent of the company, a relatively higher percentage.
Emaar the Economic City (EEC) rose 3.5 percent after Reuters quoted a source familiar with the matter as saying Saudi Arabia’s top sovereign fund, the Public Investment Fund, was in talks to invest in King Abdullah Economic City, the huge project being developed by EEC.
Insurer Wataniya, which had been languishing at a five-year low, jumped 6.9 percent in its heaviest trade in four years.
In Dubai, the index added 0.7 percent with GFH Financial, the most heavily traded stock, surging 4.6 percent. Abu Dhabi edged down 0.2 percent because of weakness in banks, with First Gulf Bank losing 1.3 percent. Most of the 10 most heavily traded stocks barely moved.
Qatar’s index edged up 0.1 percent as the market stabilised in thin trade after falling sharply for two days on profit-taking; late last month, it jumped on hopes for foreign fund inflows when FTSE upgrades Qatar to emerging market status in mid-September. Industries Qatar rose 1.5 percent on Sunday.