Saudi stocks close near 4-year high as they join the FTSE Russell index

An Emirati man follows the market activity at the Dubai stock market on March 25, 2010. Dubai's main stock market index was up 4.5 percent by midday as Dubai World proposed to repay its creditors in full by issuing two tranches of new debt maturing in five and eight years, after months of talks on restructuring sovereign liabilities that had rattled world markets. AFP PHOTO/KARIM SAHIB (Photo credit should read KARIM SAHIB/AFP/Getty Images)

UNITED STATES (VOP TODAY NEWS) — The Saudi bourse closed near a four-year high on Monday as bank shares rose on the first day of the market’s entry into the FTSE Russell Emerging Markets index, where it is expected to attract multi-billion dollar inflows from inactive funds.

Bahrain: The index rose 0.2 percent to 1,413 points.

Saudi Arabia’s stock market will weigh 2.7 percent on the FTSE Russell Emerging Markets Index. The market is preparing to receive flows from inactive funds at about $ 20 billion.

The kingdom hopes its inclusion on the indexes will help it become a major destination for foreign capital after its global reputation was damaged by the killing of journalist Jamal Khashoggi in October.

The MENA stock fund said in a note that the rise would be limited in the short term because the listing was an expected event. In the long run, there will be positive results not only for the Saudi market, but also for the entire region.

With the entry of foreigners, participants will be more institutionalized, moving on research, which will bring more discipline to the market, the note added.

“Listed companies in the Kingdom may see foreign investors’ holdings increase to 10 percent as stocks on the MSCI and FTSE Russell index are emerging,” the chief executive of the Saudi bourse told Reuters.

Saudi Arabia’s index has risen 10 percent since the start of the year, outpacing the other major GCC stock markets, with foreign investors driving purchases, and they are now a net buyer of Saudi riyals of 9.6 million riyals since the beginning of the year, Arqam Capital said.

Saudi Arabia’s main index rose 1.1 percent, with 159.2 million shares worth 3.6 billion riyals ($ 960 million). Al Rajhi Bank gained 0.8 percent, while Saudi Basic Industries Corp (SABIC) rose 1 percent.

“We expect SABIC to see the largest inflow of more than $ 110 million, while directly behind Al Rajhi Bank and National Commercial Bank,” said Nick Wilson, chairman of the Gulf Investment Fund.

Shares of Abdullah Abdul Mohsen al-Khudari’s sons jumped 10 percent. The stock has risen since shareholders voted against the liquidation of the construction company.

Abu Dhabi’s general index rose 1.8 percent, helped by Abu Dhabi’s first rise of 3.2 percent.

Global Holding jumped 5 percent after the company called a shareholders’ meeting to approve a capital increase of 1.31 billion dirhams ($ 357 million).

Dana Gas gained 1.8 percent. On Sunday, energy firm agreed on plans to buy back sukuk and said it plans to buy back 690 million shares.

Dubai’s index rose 1.6 percent, with Dubai Islamic Bank up 3.2 percent. Emaar Properties rose 2.2 percent after the emirate’s largest real estate developer said its board of directors would meet on Wednesday to discuss the full-year dividend proposal.

Qatar’s index rose 1.1 percent, with Qatar Islamic Bank up 3 percent, while Qatar National Bank (QNB), the Middle East’s biggest lender, rose 1.5 percent.

Egypt’s main index fell 0.8 percent, with Commercial International Bank (CIB), Egypt’s largest listed bank, down 1.7 percent.

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