BUS-MSCI-(Read-Only)
Saudi bourse CEO Khalid Abdullah Al Hussan with MSCI Inc CEO Henry Fernandez. MSCI added the kingdom to its developing country benchmark, using Tuesday’s closing prices. Image Credit: Bloomberg

Dubai: The value of shares to change hands on Saudi Arabia’s stock market surged to 27 billion riyals ($7.29 billion; Dh26.42 billion) as passive funds positioned themselves ahead of the Tadawul’s inclusion on the MSCI Emerging Market Index on Tuesday.

The Tadawul swung through both positive and negative zones during the day but massive orders in the last half-hour of trade fuelled a surge that saw the index close 2.02 per cent higher at 8,550.90.

“The effecting of Saudi Arabia’s inclusion is largely in line with expectations — lot of supply coming in to meet the passive demand,” Vrajesh Bhandari, senior portfolio manager at Al Mal Capital, told Gulf News.

“Some midcaps actually saw the biggest moves, since the supply there was not gathered in advance.”

$50b

funds expected to flow into Saudi equities after MSCI inclusion

Analysts expect more than $50 billion (Dh183.65 billion) to flow into Saudi equities due to the MSCI inclusion.

Al Rajhi Bank closed 2 per cent higher at 68.90 riyals while Saudi Basic Industries Corp rose 2.03 per cent to end at 110.4 riyals.

Samba Financial Group closed 2.95 per cent higher at 34.95 riyals while Riyad Bank was up 0.76 per cent to 26.65 riyals.

In the UAE, the value of shares to change hands on the Dubai Financial Market (DFM) general index jumped to nearly Dh500 million on Tuesday, more than three times the 30-day average of Dh133 million.

The effecting of Saudi Arabia’s inclusion is largely in line with expectations — lot of supply coming in to meet the passive demand. Some midcaps actually saw the biggest moves, since the supply there was not gathered
in advance.

- Vrajesh Bhandari, Senior portfolio manager at Al Mal Capital

The DFM general index closed 1.24 per cent higher at 2,607.01, mostly helped by Emaar Properties.

“The auctions in UAE markets are puzzling. Everyone expected outflows in order to make room for Saudi [Arabia],” Bhandari said. “One explanation is this — active money rotating out of KSA [Kingdom of Saudi Arabia] into other Mena [Middle East and North Africa] markets. But the buying need not have happened today and, that too, in the auction, pushing up prices. It looks all [like] passive money.”

Emaar Properties closed 4.21 per cent higher at Dh4.46 while Emaar Malls rose 4 per cent to close at Dh1.94.

2.02%

gains registered on the Tadawul to close the day at 8,550.90

The Abu Dhabi Securities Exchange (ADX) general index closed 0.26 per cent higher at 4,791.42. Traded value came in at Dh516 million, about 10 times the 30-day average of Dh47 million.

Abu Dhabi Commercial Bank closed at Dh9, up more than 2.97 per cent.

“Going forward, investors will continue to follow the developments in the regional geopolitical environment and accordingly position their portfolio ahead of a long Eid break in the following week,” Allied Investment Partners said in a note.

Elsewhere in the Gulf, the Muscat MSM 30 index closed 1.40 per cent higher at 3,918.80.