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Sun 24 Nov 2019 03:03 PM

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Saudi banks extend gains to outperform main index

The Tadawul Banks Index gained as much as 0.5% with more than half of its members advancing

Saudi banks extend gains to outperform main index

Al Rajhi Bank and National Commercial Bank contributed the most to the sector-gauge’s increase.

Most Saudi Arabian banking stocks climbed, even as the main local gauge fell, ahead of Saudi Aramco’s giant listing.

The Tadawul Banks Index gained as much as 0.5% with more than half of its members advancing, while the main local gauge slipped 0.2% as of 11:40 a.m. in Riyadh. Al Rajhi Bank and National Commercial Bank contributed the most to the sector-gauge’s increase.

Last week the index tracking 11 banks outperformed the main gauge. That’s partly because lenders are expected to get a revenue boost by providing clients margin loans and brokerage services to customers buying Aramco shares.

“Bank-management teams view Aramco’s IPO as an opportunity for the sector, rather than a challenge, with every bank looking to maximize its benefits,” CI Capital analysts wrote in a report.

Aramco garnered $73 billion of offers for its shares in the first five days of its offering, Samba Capital and Investment Management Company said last week. The IPO may be the world’s largest if the stock is sold at the top end of the range, which would give the company a valuation of $1.7 trillion. The end of the subscription period for retail investors is Nov. 28, with the final offer price to be disclosed on Nov. 5, the company said last week.