Riyadh: Saudi Arabian stocks advanced the most in three months on optimism consumer spending will rise after King Salman restored bonuses and allowances for state employees.
The Tadawul All Share Index climbed 1.7 per cent as of 10:05am in Riyadh as almost 90 per cent of the gauge’s 176 members rose. The Tadawul Banks Index was the biggest contributor to the gain, adding 1.4 per cent, while the Tadawul Retailing Index was the best performer on a per cent basis, jumping the most in two months.
The king reinstated the bonuses, which had been cancelled in September, after revenue increased and an unprecedented economic overhaul helped narrow the budget deficit. The announcement came hours before the Middle East’s biggest bourse implemented rules to allow short-selling and shifted its settlement cycle to T+2, bringing the exchange in line with international peers.
The exchange in 2015 allowed investors abroad to trade shares directly for the first time. Even after the government further eased the requirements to access the market last year, foreigners hold less than 5 per cent of the total market capitalisation.
The kingdom is seeking inclusion in MSCI Inc.’s emerging-market index, which is tracked by fund managers globally, to boost trading. It’s also planning what could be the world’s biggest initial public offering when it sells shares in oil giant Saudi Arabian Oil Co., also known as Saudi Aramco.
Cheap Loans
Saudi Arabia may offer “almost interest-free” loans to companies in labour-intensive industries and may tap the international debt market again this year to finance its budget gap, Finance Minister Mohammed Al-Jadaan said in an interview. Austerity and low oil prices have led to the worst economic slowdown since the global financial crisis.
All but one of the 12 members of the Tadawul’s banking index advanced, led by Al Rajhi Bank’s 1.8 per cent rise. The lender accounts for about 13 per cent of main stock gauge.
