Saudi handouts bolster stocks, eclipse Libya fears

  • Share via facebook
  • Tweet this
  • Bookmark and Share
(Getty Images)

(Getty Images)

Massive handouts to the citizens of Saudi Arabia, the most economically important and influential Arab country, boosted investor sentiment in the Gulf, eclipsing regional upheaval and Western air strikes on Libya.

The Saudi index TASI registered its biggest gain in over two weeks, ending at a one-month high, as investors made a return following a $93bn handout by King Abdullah.

The benchmark climbed 4.5 percent at 6,344 points, its highest value since February 19 after its biggest gain since March 5.

King Abdullah decreed $93bn in handouts on Friday to lift wages, create jobs and build homes for Saudi Arabia's rapidly-growing young population, trying to head off any potential discontent within its borders.

"The major impact is due to King Abdullah's speech on Friday ... investors who left the market after the unrest are looking to return," said Hesham Tuffaha, head of research at Bakheet Investment Group in Riyadh.

Saudi Basic Industries Corp (SABIC) gains 4.6 percent and Al Rajhi Bank climbed 5.1 percent.

Stocks in Qatar and UAE rose by more than two percent.

"Saudi Arabia contributes to almost 50 percent of the GDP of GCC countries... a boost in the kingdom's economy will reflect in all regional markets and that's what we saw today," Hesham Tuffaha, head of research at Riyadh-based Bakheet Investment Group, said on Sunday.

The index may gain 2 to 3 percent more, reaching 6,500 points by the end of the week, Tuffaha estimated.

An exodus of businesses from unstable North African markets may eventually help lift the relatively safer Gulf markets of UAE and Qatar, analysts say.

"Local institutions and foreign buyers in the region are on a lookout for markets away from political tensions... UAE and Qatar provide such an environment," Samer al-Jaouni, general manager of Dubai-based Middle East Financial Brokerage Co, said.

The Dubai DFM and Qatar QSI benchmarks ended at a week high, gaining 2.6 percent each. Dubai bluechip Emaar Properties gained 3.9 percent and Arabtec surged by 9.2 percent to a four-week high. The latest handout by King Abdullah was in addition to the $37bn announced last month to ease social tensions.

"In combination, both the stimulus plans in Saudi, will have some positive impact on the ground in the short-term," said Akber Naqvi, fund manager at Al Masah Capital in Dubai.

Saudi Basic Industries Corp advanced by 5.4 percent and Al Rajhi Bank climbed 5 percent.

Kuwait's bourse was one of the few losers, as the index was weighed down by a drop in shares of telecom firm Zain.

Zain dropped 4.4 percent to a three-week low, after Etisalat scrapped its $12bn deal to buy a controlling stake in the Kuwaiti telecoms group.


Market Performance

Emaar Properties - UAE
0.0 0.0 (%)
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Taking stock

Taking stock

Gulf stock markets have seen a dearth of IPOs since the global...

Steering clear of the stock markets

Steering clear of the stock markets

Listing was all the rage three years ago, but IPOs have since...

Egyptians vent post-revolt fury in litigation

Egyptians vent post-revolt fury in litigation

Bankers, stockbrokers say indiscriminate corruption probes may...

Most Discussed
  • 10
    UAE father who whipped son to death wins appeal

    "Under Sharia, a parent cannot be executed for killing their child"
    A spouse could be executed if he/she kills his/her spouse, as none of them is... more

    Friday, 18 April 2014 3:38 PM - Nihar
  • 3
    To diet or not to diet?

    It is best to eat by your blood type. Following this diet is miraculous. Generic diets don't always work as certain foods are not good for the individual... more

    Friday, 18 April 2014 11:49 AM - Shamira Mitha
  • 2
    Saudi conservatives stage rare protest against Westernisation

    While one certainly appreciates a country to retain its own culture and heritage, one might call the current status in Saudi something like "stoneage"... more

    Saturday, 19 April 2014 1:51 AM - Non-Muslim
  • 54
    Three UAE women attacked with hammer at London hotel

    I really feel that Arabian Business.Com should now close this comments page. This should be all about sympathy for the families not what it is/has turned... more

    Wednesday, 16 April 2014 1:06 PM - Adrienne
  • 51
    Why Dubai isn't a plastic city

    What is definitely not a plastic city. The Arabs have a culture dating back to several centuries. 50 years back Dubai was just a fishing village. Today... more

    Tuesday, 8 April 2014 3:49 PM - P. MADHUSUDAN
  • 48
    DMCC boss Ahmed Bin Sulayem entertains Robert Mugabe in Dubai

    @fga ''However today, simply because he decided to dispossess a few white farmers of their land and redistribute to the poorer indigenous blacks'' more

    Sunday, 13 April 2014 3:02 PM - Matt Williams