Aramco-SABIC deal lifts Saudi, ex-dividend markets hurt Abu Dhabi

Saudi Arabia’s stock market inched up on Thursday after oil producer Saudi Aramco agreed to buy a 70 percent stake in Saudi Basic Industries, while Abu Dhabi’s stock market fell as some stocks traded ex-dividend.

Saudi Arabia’s index was up 0.2 percent with market heavyweight Saudi Basic Industries (SABIC) gaining 1.6 percent after the world’s largest oil producer Saudi Aramco agreed to buy a 70 percent stake in the firm from the Public Investment Firm (PIF) for $69.1 billion.

The mega deal sent Saudi’s petrochemical stocks higher, with SABIC’s unit Saudi Kayan Petrochemical adding 0.9 percent, while Aramco’s unit Rabigh Refining rose 0.2 percent.

The deal is likely to be a “long-term game changer” for the petrochemical firm, as Aramco would channel its growth into chemicals via SABIC, implying a potential comeback on growth, Arqaam Capital said.

The Abu Dhabi index dropped 1.1 percent with Emirates Telecommunications Group losing 1.9 percent and Aldar Properties plunging 7.3 percent as they traded ex-dividend.

Abu Dhabi Commercial Bank also shed 3.8 percent after trading ex-dividend.

Dubai’s index dropped 0.4 percent, sliding for a third straight session, weighed down by its property stocks.

Emaar Properties fell 0.7 percent and the country’s largest lender Emirates NBD shed 1 percent.

Dubai’s property prices were partly behind the index’s worst performance in local currency terms when compared with other major global markets last year.

Islamic Arab Insurance dropped 2.2 percent after the insurer’s board decided not to distribute a dividend for 2018.

The Qatar index was flat, with Qatar Gas Transport rising 4.3 percent. The firm said it has established a joint venture with Maran Ventures in which it will hold a 60 percent stake.

Source: Reuters