Jordan cement deal helps Saudi shares

Dubai : Saudi Arabia’s stock index edged higher yesterday after Al Jouf Cement and Saudi Industrial Export Co announced an export deal with Jordan, but the region as a whole traded in small ranges, lacking fresh stimulus.

The Saudi index closed 0.1 per cent higher at 6,939 points after approaching and failing to break technical resistance around 7,000 points, which has held since mid-October.

Al Jouf rose 3.4pc and Saudi Industrial Export Co, which has been trading at 13-year lows, jumped 5.1pc. Saudi Industrial Export said it had signed a sale and marketing contract with Al Jouf to supply 72,000 tonnes of cement annually to Jordan.

Saudi cement firms have been hit by a domestic construction industry slowdown, and the Jordan deal appears to mark one of the industry’s first major export successes, after the Saudi government said in July that it was slashing cement export tariffs by 50pc.

Exchange data released late on Sunday showed foreign investors were net sellers of Saudi Arabian equities for a third straight week in the wake of authorities’ sweeping crackdown on corruption, but by a smaller margin than in the previous week, suggesting capital flows may soon stabilise.

Foreign investors sold 835 million riyals ($223m) of Saudi stocks and bought 598m riyals in the week through Nov. 23, resulting in net selling of 237m riyals. That compares with net selling of 309m riyals in the week to Nov. 16 and 1.08 billion riyals in the week to Nov. 9, immediately after the purge was announced.

In Qatar, the main index also edged up 0.1pc. Vodafone Qatar, the most heavily traded stock, surged 4.0pc real estate firm Ezdan Holding, which was downgraded to junk status by credit rating agency Standard & Poor’s earlier this month, climbed 4.7pc. It has been recovering since late last week but is still down 47pc year-to-date.

Dubai’s index edged down 0.1pc although Drake & Scull rose 2.3pc after it announced its shares had been included in the MSCI GCC index. That index covers about 85pc of the free float-adjusted market capitalisation in the Gulf Cooperation Council, and is less exclusive than MSCI’s emerging markets index, which is used by many more funds.

The index was held down by Emaar Properties, which fell 0.9pc, and GFH Financial, which lost 1.7pc.