Trading thin on first day of Ramadan

SAUDI SHARES: Index saw a two-year low in the number of shares traded. (Getty Images)

Saudi Arabia’s benchmark index inched down in thin trade as the Muslim fasting month of Ramadan started on Monday.

The index closed 0.06 percent lower at 8,751.87 points.

A total of 56.64 million shares were traded, the lowest in two years according to al-Riyadh newspaper, and below the 79.5 million shares traded on Sunday.

Saudi Basic Industries Corp led trade in terms of value and closed 0.39 percent down.

“It’s a psychological war. Investors want blue chips but there is reluctance to sell because people believe prices ought to go higher and major buyers are using Ramadan to give potential sellers the impression that there is no demand,” a senior trader said.

“This may last throughout the next four weeks which means the index will move little unless the regulators do something with these swap agreements,” he added.

Saudi Arabia last month allowed non-resident foreign investors to sign swap agreements with Saudi intermediaries, permitting a form of indirect ownership of the shares in one of the boldest moves the kingdom has yet taken to open its exchange to foreigners.

But the regulators have yet to authorise the first agreements.

Lebanon’s BLOM index edged down 0.4 percent to 1,787.24 points, weighed down by heavyweight Solidere. The real estate firm’s A share closed 1.2 percent lower at $28.76 and its B share ended 0.4 percent lower at $28.72.

Oman shares closed higher as investors hunted for bargains after recent sharp falls.

Oman’s benchmark, which fell more than 11 percent in August, climbed 1.79 percent to 9,663.54 points.

Omantel added 2.87 percent and Raysut Cement Co gained 4.23 percent.

Blue-chip stocks led Qatar’s benchmark index to a higher close as local investors snapped up bargains in late trading while foreign investors remained on the sidelines.

The benchmark added 1.03 percent to close at 10,550.27 points.

“Trade picked up towards the end of the session so the turnover was better than what we expected for a first day of Ramadan,” said Amro Motasim, chief trader at Ahli Bank.

“Foreign investors were not very involved. Buying was by local portfolios and high net worth individuals who felt the prices were attractive. These usually pull behind them retail investors,” he added.

Qatar Industries gained 0.36 percent. “It was the main attraction although some late selling reduced gains it made earlier in the day,” Motasim said.

Qatar Telecom rose 1.38 percent and Qatar National Bank rose 1.27 percent

Real estate stocks led UAE markets down in lacklustre trading.

Shares continued to slide amid ongoing concerns of a crackdown on corruption and speculation.

“People have become bearish on real estate in Abu Dhabi. The same applies to Dubai,” said Mohamed Alami from Naeem Brokerage.

Islamic mortgage lender Tamweel shed 1.68 percent and Emaar Properties slid 0.55 percent.

Dubai's index dropped 0.38 percent to 4,744.74 points.

Aldar Properties fell 4.12 percent, Sorouh Real Estate dropped 2.89 percent and Emirates Telecommunications (Etisalat) shed 1.39 percent.

The Abu Dhabi index fell 1.25 percent to end at 4,358.13 points.

“The main characteristic today was the very, very low volumes, liquidity was the lowest in months this year,” Alami said.

“Institutions are holding a lot of cash on the side right now ... They are becoming more risk averse,” he added.

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