Gulf stock markets closed in positive territory on Sunday, boosted by a surge in oil prices, an increase in retail investors and encouraging news on Bahrain's financial prospects. Oil prices surged last week on concerns that US sanctions against Iran would remove a substantial volume of crude oil from world markets at a time of rising global demand.
Bahrain's bonds and currency rebounded from multi-year lows late last week after Saudi Arabia, Kuwait and the United Arab Emirates said in a joint statement that they would announce soon measures to support its economy. The Bahraini index closed 0.2 percent up on Sunday. It climbed 0.9 percent since last week's announcement from the country's regional allies.
The Saudi index gained 0.3 percent, with petrochemical companies rising on the back of higher oil prices, and with real estate investment trust funds posting large gains of up to 10 percent. The best performer was Al Jazira Mawten REIT, up 9.9 percent, followed by Taleem REIT Fund, which jumped 9 percent. A fund manager said an increase of retail investors participating in the Saudi market over the last week could have pushed REIT valuations up, given that REIT stocks are generally speculative and attract high-yield seekers.
Lifted by surging oil prices, petchem companies such as Saudi Kayan Petrochemical Co. and Sahara Petrochemical Co. gained 1.3 percent and 1.9 percent, respectively. The worst performer was Fawaz Abdulaziz Alhokair Co. , with stocks in the Saudi retailer plunging 6.4 percent after the company reported its annual financial results late last week.
Net profit for the year ending on March 31 2018 declined 76 percent, to 103.5 million riyals from 425.3 million riyals the previous year, it said. Stock exchanges were up across the region, with the Dubai index and the Abu Dhabi index up 1.5 percent and 1.3 percent respectively.
In Abu Dhabi, Eshraq Properties jumped 6.7 percent. The company said last week it was seeking to deploy "excess liquidity" in investments across the United Arab Emirates, after dropping merger plans with Abu Dhabi developer Reem Investments. It also said it has no exposure to Dubai's private equity Abraaj Group.
In Dubai, most stocks were up but trading volume was concentrated on Drake & Scull (DSI), which shed 0.7 percent after some gains earlier on Sunday. Over the past two months, shares in the contractor have been dropping, going down to their lowest level ever, as retail investors offloaded them amid concerns about DSI's business outlook and an investigation into its former management team.
The company said in a bourse filing last week that the recent sell-off of its shares was not related to any major news. Outside of the Gulf, the Egyptian exchange was closed because of a national holiday.
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