Upbeat Saudi banking stocks lift Gulf markets


Bahrain’s index closed 0.7% higher at 1,558 points. Oman’s index rose 1.3 points to 6,737 points.

Kuwait’s benchmark gained 1.3% to 7,897 points.

The Saudi banking sector, led by Samba Financial Group, has been rising because of a Credit Suisse upgrade of six banks and the news that Saad Group has agreed a debt agreement with the local banks.

As a result of the deal, Saudi banks “could be able to reverse some of the provisioning they had taken during the past quarter, hence strengthening their asset quality and boosting their bottom line,” Shuaa Capital analysts said.

But Shuaa warned that “a single-sided settlement that excludes international and GCC ex-Saudi creditors could engage the Saudi banking sector as a whole in a worthiness dispute which would affect its long term rating.” Saudi Arabian stocks, which posted a 3.1% gains on Saturday, clocked up 0.8% yesterday.

Samba closed 9.4% higher, while Al-Rajhi Bank lost 2%.

Dubai’s and Abu Dhabi’s bourses, partly helped by banking stocks, ended 0.6% and 0.2% higher respectively.

Oman’s market outperformed regional peers, also receiving a boost from banks. Investors are already anticipating the third-quarter results for banks, which should be positive, says Shailendra Singh, investment manager at Al-Shurooq Securities.

“Costs have gone up for the banks, but we believe that is already priced in,” he said.

Kuwait’s benchmark also closed higher. “I think overall market participants have positive view on the (Gulf) markets, especially with regards to catching up with other emerging markets,” said Abdul-Muhsen al-Hamad, investment manager at Noor Financial Investment Co.

“Investors are betting that GCC markets are the next to invest in.” Going forward, local markets will look again at international markets for direction, Shurooq’s Singh said.




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