RIYADH: Banking shares boosted Saudi Arabia’s stock index yesterday to its highest level this year, while other Gulf markets moved little in quiet trade with some foreign investors absent for New Year holidays. The Saudi index closed up 1.3% at 7,257 points in its highest trading volume for two weeks, rising above technical resistance at this year’s previous peak of 7,235 points hit in early December. The banking sector surged 1.8% as the biggest lender, National Commercial Bank, climbed 2.1%.
Banks underperformed the market in the initial reaction to the 2017 state budget at the start of this week, when activity focused on other sectors including petrochemicals. The budget was generally viewed as positive by analysts because it was modestly expansionary while including a further cut to the deficit. But the economic climate next year is expected to be difficult because of fresh austerity measures.
Saudi Electricity, which has been buoyed by plans in the budget to raise power tariffs later this year, rose 1.8%.Much activity focused on second- or third-tier stocks favoured by local retail investors, including Tihama Advertising which jumped its 10% daily limit. It resumed trading this week after being suspended because it delayed announcing its financial results. Dubai’s index fell 0.3% to 3,542 points as DXB Entertainments pulled back 1.5%. Abu Dhabi rose 0.3% to 4,469 points on the back of a 0.9% gain by Abu Dhabi Commercial Bank. Egypt’s blue-chip index closed flat in heavy trading volume, with foreign investors net buyers by a small margin. Egypt Gas Co surged 5.3% after it predicted lower net profit but higher revenues in 2017. Elsewhere in the Gulf, the Kuwait index rose 0.5% to 5,745 points, the Oman index gained 0.6% to 5,761 points and the Bahrain index rose 0.3% to 1,211 points.
