Stocks across Middle Eastern markets surged after oil prices rebounded and global equities rallied.
The DFM General Index climbed 5.6 per cent in Dubai as of 1:08 p.m. as traders exchanged 352 million shares, 39 per cent above the 12-month full daily average volume. Qatar’s QE Index and Abu Dhabi’s ADX General Index climbed 5.2 per cent and 3.4 per cent, respectively. Saudi Arabia’s Tadawul All Share Index soared as much as 6.8 per cent before paring the gain to 3.5 per cent.
Middle Eastern shares rallied after oil advanced the most since August on Friday. While governments in the six-nation Gulf Cooperation Council have attempted to diversify their economies away from crude, the commodity remains the region’s biggest source of revenue. The equity advance also follows the biggest surge in world stocks since June 2012 on speculation central banks will expand stimulus measures to counter turmoil in financial markets.
“The global rally and oil price recovery is a great signal for investors here to buy,” said Hisham Khairy, the Dubai-based head of institutional trade at Mena Corp. Financial Services LLC, one of the United Arab Emirates’ largest brokerages. “If tomorrow the market opens higher, it would offer a great selling opportunity.”
Brent crude, a pricing benchmark for half of the world’s oil, soared 10 per cent to $32.18 a barrel on Friday. U.A.E. Energy Minister Suhail Al Mazrouei sees the price of oil stabilising either at the end of this year or the beginning of 2017. The GCC is home to about 30 per cent of the world’s proven reserves.
The gauge that tracks some of the region’s top companies climbed the most since August. Saudi Basic Industries Corp., one of the world’s biggest chemicals manufacturers by sales, was the biggest contributor to the Bloomberg GCC 200 Index’s increase as the stock rose 5.7 per cent.
Al Rajhi Bank in Saudi Arabia followed with a 6.5 per cent gain. The lender’s board recommended a dividend of 1 riyal per share for the second half of 2015 after the bank posted a 28 per cent increase in fourth-quarter profit.
The kingdom may sell shares in Saudi Arabian Oil Co. in an initial public offering, the company known as Aramco said this month, after the drop in crude prices strained the nation’s finances. The sale won’t include crude oil reserves, which belong to the state, Chairman Khalid al-Falih told Al Arabiya TV in an interview. Oil prices will recover in the second half of the year as demand grows, he said.
Saudi Arabian Airlines plans to raise as much as 5 billion riyals ($1.3 billion) from the sale of Islamic bonds in the second quarter to refinance loans and buy planes, Director General Saleh Al Jasser said on Friday.
Kuwait’s SE Price Index stocks and Oman’s MSM 30 Index advanced 0.6 per cent and 1.5 per cent, respectively. Egypt’s EGX 30 Index added 4 per cent and Tel Aviv’s TA-25 Index increased 1.7 per cent. Bahrain’s Bourse All Share Index and the Palestine General Index were the region’s only decliners, dropping 0.2 per cent, each.
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