Gulf stocks consolidate, Saudi unmoved by market reforms

Gulf stock markets consolidated in quiet early trade Tuesday with Saudi Arabia’s bourse unmoved by the announcement of reforms designed to stimulate trading and draw fresh foreign money into the market.

The Capital Market Authority said it would lower the minimum assets-under-management requirement for foreign institutions investing directly in the market, and allow each foreign investor to own a stake of just under 10 percent of a single company. Previously, the ceiling was 5 percent.

Meanwhile the Saudi Stock Exchange said it would introduce the settlement of trades within two working days of execution, a reform that could help the market join MSCI global indexes. Currently, settlement is same-day, which is inconvenient for many foreign investors.

But the reforms will not be implemented before 2017, and other factors such as high valuations have also been deterring foreign investors, so the market barely reacted.

The Saudi stock index edged up 0.2 percent in early trade, with Arabia Insurance Cooperative climbing 3.1 percent after the regulator approved a request for it to reduce its capital.

Jarir Marketing fell 0.8 percent and Saudi Hollandi lost 1.5 percent as both stocks went ex-dividend.

Dubai’s index was flat and Abu Dhabi dropped 0.5 percent as some banks remained soft after last week’s disappointing first-quarter earnings, with Abu Dhabi Commercial Bank off 0.6 percent. Qatar edged down 0.1 percent.

Source: Reuters