Saudi SABB, Alawwal rise on merger, Gulf stocks otherwise quiet

A merger between Saudi Arabia’s Alawwal Bank and Saudi British Bank has been one of the few sources of excitement in Gulf stock markets early Thursday, with most shares moving little.
The Saudi Arabian stock index was flat. Most banks were sluggish but Alawwal jumped 3.5 percent to 14.70 riyals in heavy trade while SABB gained 2.2 percent to 32.95 riyals.
Under the binding deal, reached after the banks revealed merger talks earlier this year, SABB will pay for the merger by issuing new shares and the deal values each Alawwal share at 16.26 riyals, the banks said.
Although the agreement values Alawwal above market, SABB could benefit from increased size; the merger would create Saudi Arabia’s third-biggest lender with market capitalisation above $17 billion, it said.
Of seven analysts covering SABB, three have a “strong buy” on the stock, one has a “buy” and three have a “hold”; their median target price is 34.25 riyals, according to Refinitiv data.
Meanwhile, Samba Financial Group fell 1.1 percent and other banks such as Al Rajhi moved sideways.
In Qatar, the index edged up 0.3 percent, aided by a 0.7 percent rise in Qatar Navigation.
Dubai’s real estate stocks continued to drag down the index , which slid 0.4 percent, heading for its third straight session of losses. Emaar Properties slipped 1.4 percent.
Loss-making construction firm Drake & Scull, which had been rebounding in recent days, fell back 1.4 percent on the day of a shareholder meeting which is expected to discuss ways to strengthen the company.
The Abu Dhabi index eased 0.2 percent as Aldar Properties dropped 1.1 percent.
Source: Reuters