Gulf moves little, cement shares lose steam

Dubai : Gulf stock markets moved little yesterday as Saudi Arabian cement shares lost steam after the release of the 2018 state budget, and Qatar’s market pulled back after a leap on Tuesday.

The Saudi index edged up 0.2 per cent as cement shares, which had surged in the days before the release of the budget as investors anticipated an increase in infrastructure spending, ran into profit-taking. Yanbu Cement fell 1.8pc.

The budget was seen positively by the market; the government said it planned to increase total spending to a record 978 billion riyals ($261bn) in 2018, from 890bn riyals in the original 2017 budget plan and 926bn riyals of actual spending this year. King Salman formally announced the target date for eliminating the budget deficit would be pushed back to 2023 from 2020.

“In our view the budget is expansionary - it calls for the right approach,” said Santhosh Balakrishnan, assistant vice-president at Riyad Capital.

“What lies ahead is the green shoots of recovery in construction-allied sectors, especially cement. This suggests the worst is behind us.”

London-based Capital Economics said actual 2017 spending data showed the government had already started to loosen fiscal policy earlier than expected, and because of this, Capital raised its economic growth forecast for 2018 to 1.5 percent from 0.8 percent.

In Qatar, the index edged down 0.03 percent in active trade after surging 3.8 percent on Tuesday to its highest level since late September as retail investors flocked back into the market.

Dubai’s index rose 0.3 percent on the back of a 2.3 percent gain by blue chip Emaar Properties, which has been trading near its lows for the year.

But its affiliate Emaar Development, which listed last month after an initial public offer at a price of 6.03 dirhams a share, fell 1.3 percent to a record closing low of 5.15 dirhams.

District cooling firm Tabreed, which is usually thinly traded, was the most active stock and dropped 1.1 percent. The stock recorded its highest volume since June.