SAUDI STOCKS1
The Saudi Stock Exchange, also known as the Tadawul, in Riyadh. Image Credit: File photo

Dubai: The Saudi Tadawul index tumbled more than 1.5 per cent on Thursday as traders braced for the MSCI emerging market inclusion next week.

The Tadawul index traded at the day’s low of 8,501.67, down 1.78 per cent, falling from an intra-day high of 8,662.96. The index has been on a downward path, and has shed 9 per cent since May 1. The gauge had been the best performing market in the region, and have shaved off 50 per cent of the gains.

“We expect Tadawul to be fairly range bound — the supply is well managed and at lower levels, it attracts opportunistic traders,” Vrajesh Bhandari, senior portfolio manager at Al Mal Capital, told Gulf News.

In stock-specific action, Al Rajhi Bank closed 2.14 per cent lower at 68.60 Saudi riyals. Saudi Basic Industries Corp was 2.49 per cent lower at 109.60 riyals. National Commercial Bank closed 0.87 per cent lower at 57 riyals.

We expect Tadawul to be fairly range bound — the supply is well managed and at lower levels, it attracts opportunistic traders.

- Vrajesh Bhandari, Senior portfolio manager at Al Mal Capital

The MSCI will add Saudi Arabia’s Tadawul index to the emerging market index from close of May 28 with a weight of 1.42 per cent, the highest in the region.

About 30 Saudi stocks will be added in the first tranche, and analysts expect an inflow of more than $50 billion. “Beyond the MSCI flows, investors need to be selective & focus on individual stories in the Kingdom — the midcap space has some interesting ideas,” Bhandari said.

The Dubai Financial Market general index closed 0.21 per cent higher at 2,589.68. Emaar Properties closed 1.8 per cent higher at Dh4.42.

Dubai Islamic Bank closed 0.4 per cent higher at Dh4.97. DP World closed 2.29 per cent higher at $17.89. Emaar Malls closed 1.65 per cent higher at Dh1.85.

Emirates NBD closed 0.9 per cent lower at Dh11.

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Tadawul index falls from high Image Credit: Tadawul/Gulf News

Traded value has been staying flat. On Thursday, traded value rose to Dh176 million, up from the 30-day average of Dh141 million.

“UAE markets should be back in focus after the Eid break, once investors are done with the Index inclusion themes of Saudi [Arabia] and Kuwait. We prefer to stick to high quality companies, where cash flows are stable,” Bhandari said.

The Abu Dhabi Securities Exchange general index closed 0.58 per cent higher at 4,777.32. First Abu Dhabi Bank closed at Dh13.90, up 0.58 per cent,

Elsewhere in the Gulf, the Muscat MSM 30 index closed 0.37 per cent higher at 3,875.89. The Kuwait all share index closed 0.46 per cent lower at 5,578.94.