Saudi stocks extend gains before market opening

Saudi Arabian stocks rallied a fourth day as some investors took positions before next month’s market opening and after oil prices stabilised. Abu Dhabi shares declined amid a slump in the value of equities traded.

The Tadawul All Share Index added 0.8 percent to 9,813.08 at 1:41 p.m. in Riyadh, heading for the highest close this month. Saudi Basic Industries Corp., the world’s top petrochemicals manufacturer by sales, led advances as it climbed for a fourth day. Abu Dhabi’s ADX General Index slid 1 percent, its first drop in six days.

“The Saudi market is edging closer to opening up its doors to foreign investors, which is pushing local investors to position themselves ahead of the actual event,” John Sfakianakis, the Riyadh-based director of the Middle East at investment manager Ashmore Group plc, said by phone. “Oil has been doing quite well for the last few sessions, holding near $67 a barrel, which is adding to investor confidence.”

Brent crude, a benchmark for half the world’s oil, gained more than 2 percent last week.

OPEC’s biggest exporter is opening a stock market that’s among the least accessible to direct foreign investment for the first time as King Salman pushes ahead with efforts to diversify the economy away from crude. The Riyadh-based Capital Market Authority this month published regulations allowing foreigners access starting June 15.

Investors from outside the six-nation Gulf Cooperation Council currently gain entry into shares listed on the market through equity swaps and exchange-traded funds.

Sabic rose 1.3 percent to 109 riyals, headed for the highest close since November 3. Al Rajhi Bank, the lender with the biggest weighting on Saudi Arabia’s benchmark index, rose 1 percent, set for the strongest finish in almost seven months.

First Gulf Bank PJSC, the United Arab Emirates’ third-biggest bank by assets, led the Abu Dhabi index lower as the lender declined the most since since May 4. The index fell to 4,584.48 as about 142 million dirhams ($39m) of shares traded in the emirate, less than half the one-year daily average of about 338 million dirhams.

“The current levels are not supported by enough liquidity, which explains the weariness on part of investors who are waiting for better entry points,” Wadah Al Taha, the Dubai-based chief investment officer of Al Zarooni Group, said by phone. “It’s a pure lack of catalyst and investors have minimal motivation to enter the market.”

Dubai’s DFM General Index lost 0.1 percent. Qatar’s QE Index rose 0.2 percent and Kuwait’s SE Price Index added 0.1 percent. Bahrain BB All Share Index decreased 0.4 percent.

Egypt’s EGX 30 Index climbed 0.2 percent, the first advance in eight days. Around 197 million pounds ($26m) of shares were traded, compared with a one-year full daily average of 635 million pounds.

The measure increased even as violence broke out in the Arab World’s most populous country, after a Cairo court on Saturday issued a preliminary death sentence against former Islamist President Mohamed Mursi and more than 100 others.

Even if protests take place and people take to the street, “the market doesn’t react now,” Marwan Bishara, the director of institutional sales at Naeem Brokerage, said by phone from Cairo. “It has built immunity.”

Standard and Poor’s revised Egypt’s outlook to positive from stable on May 15, which has also helped the market, Bishara said.

Israel’s TA-25 Index increased 0.4 percent, headed for the highest close since April 27. Opko Health Inc. led the advance with a 6 percent jump to a record.