Saudi's main index breaks through 11,000-point barrier while Arabtec helps Dubai bourse to close higher
Expectations of strong global demand for petrochemicals supported the uptrend in Saudi Arabia's stock market on Wednesday, lifting the bourse to a fresh six-year high, while Dubai builderArabtec jumped on hopes that a key shareholder would increase its stake.
Saudi Arabia's main index rose 0.8 percent to 11,030 points, closing above 11,000 points for the first time since January 2008.
Petrochemicals were among the main drivers; Saudi Basic Industries rose 1.2 percent, Saudi International Petrochemical Co (Sipchem) jumped 4.7 percent and Saudi Kayan Petrochemical Co added 2.5 percent.
"Expectations of an increase in global demand for petrochemical products helped the sector to gain such momentum prior to the release of American durable goods orders and American consumer confidence index data, which (then) gave more optimism for the biggest economy in the world," said Turki Fadaak, research and advisory manager at AlBilad Capital in Riyadh.
U.S. consumer confidence rose in August to its highest level since October 2007, while durable goods orders rose a record 22.6 percent in July.
However, a number of Saudi banking stocks, which had posted strong gains over the last few weeks, pulled back on Wednesday. Banque Saudi Fransi fell 1.9 percent, Samba Financial Group edged down 1.1 percent and Saudi British Bank was down 1.4 percent.
In Dubai, renewed speculation in the shares of builder Arabtec, which jumped 4.8 percent to 4.79 dirhams and was the market's most heavily traded stock, helped lift the emirate's index 0.2 percent.
Investors buying Arabtec hope that Abu Dhabi state fund Aabar Investments, a major shareholder in the firm, will soon buy at least a part of the 27.90 percent stake held by Arabtec's former chief executive Hasan Ismaik - and will pay a premium to the market price.
After trading closed, Ismaik told Reuters that he was in talks with Aabar on selling some of his stake and wanted over 5 dirhams per share.
Meanwhile, the Dubai-listed shares of Bahrain's Gulf Finance House closed 0.2 percent higher. They had risen as much as 1.9 percent intra-day after the firm said it had secured a $105 million credit facility from Kuwait Finance House , which would help GFH redeem two syndicated debt facilities and allow the release of some major GFH assets.
The facility accounts for a large proportion of GFH's debt; the Bahraini firm noted it had paid down some $30 million of current outstanding debt facilities to date in 2014, or over 15 percent of its total liabilities. The Kuwait-listed shares of Kuwait Finance House slipped 1.2 percent.
Abu Dhabi's bourse edged up 0.3 percent on the back of blue chips First Gulf Bank and Aldar Properties which rose 1.4 and 2.0 percent respectively.
Qatar's benchmark pulled back 0.3 percent, dragged down by banks. Shares in Masraf Al Rayan fell 2.3 percent, Qatar International Islamic Bank dropped 3.2 percent and Qatar National Bank slipped 0.4 percent.
Egypt's index ended a two-day profit-taking bout and edged up 0.2 percent. Telecom Egypt was the main support, rising 2.0 percent after the company called a shareholder meeting on Sept. 8 to vote on the 2014 dividend.