Saudi stocks were trading 0.2 per cent higher on Sunday, a day ahead of the exchange’s inclusion in the FTSE Russell’s emerging market index, while other Gulf markets were mixed.
The Saudi index has gained 9.8 per cent so far this year, outperforming major Gulf markets. Foreign investors have been net buyers of Saudi stocks every week this year, positioning for passive fund inflows after its inclusion in the FTSE Russell index on March 18 and MSCI in late May.
Foreign net buying has hit $2.1 billion year-to-date.
“We can reasonably expect between 90 billion to 100 billion riyals ($24-$27 billion) inflows,” said Muhammad Faisal Potrik, head of research at Riyad Capital.
He said traded value is also expected to rise 14 per cent to $100 million a day in the wake of Saudi’s inclusion in key benchmark indices.
On Sunday, the Saudi market was steady with some of the non-financial stocks weak, notably Saudi Basic Industries which fell 0.2 percent and Saudi Telecom which dropped 0.6 percent.
However, Al Rajhi Bank was up 0.5 per cent, while Saudi British Bank gained 1 percent.
Potrik said, as opposed to more significant rallies in Dubai 12 months before index inclusion, the Saudi index has risen only by a modest 14 per cent in the last 12 months.
The market was hit by selling in the second half of the year, as foreign funds sold in the aftermath of the murder of Saudi journalist Jamal Khashoggi in early October in the Saudi consulate in Istanbul.
Among other Gulf markets, the Abu Dhabi index fell 0.6 per cent, hit by weakness in market heavyweights, First Abu Dhabi, which was down 1.4 per cent, and Emirates Telecommunications Group, which fell 0.9 per cent.
Dana Gas, however, gained 2.7 per cent after the company approved plans for a sukuk buyback and also said it plans to seek shareholder approval to buy back 690 million of the company’s shares. The company said share buyback is aimed at enhancing shareholder value.
Dubai stocks were up 0.1 per cent, with Emaar Properties up 1.1 per cent. However, Aramex was down 2.1 per cent after Australia Post sold its 10 per cent stake in the company.