All major Gulf markets performed strongly on Monday after last week's holidays as a global rally lifted regional sentiment, with Saudi and Qatar outperforming and boosted respectively by expected foreign fund inflows and a stock split.
"All MENA markets have come back strong from the Eid-ul-Fitr break. The Global lead has been positive but the local factors are also supportive," said Vrajesh Bhandari, senior portfolio manager at Al Mal Capital.
Saudi's index rose 1.7% with its largest lender National Commercial Bank jumping 3.6% and biggest petrochemical maker Saudi Basic Industries adding 2.6%. The index has gained over 12% year-to-date in a rally led by foreign investors, who have been net buyers of Saudi stocks every month this year.
Saudi stock exchange data released late on Sunday showed foreigners bought a net 17.62 billion riyals ($4.70 billion) of Saudi stocks last month. A third tranche of the FTSE Russell emerging market index will kick in this month after Saudi stocks were included in two tranches in March and April.
"Investors are again repositioning for the FTSE flows in Saudi," added Bhandari. Late last month the Saudi equity market joined the MSCI Emerging Market index, which is expected to trigger billions of dollars of foreign fund inflows.
Qatar's index rose 2% with banks leading gains in 18 of its 20 stocks. The Middle East's largest lender Qatar National Bank climbed 3.8% and Qatar Islamic Bank was up 2.3% ahead of a split of their stocks taking effect later this week.
"Qatar is sharply ahead on local retail accumulation as we go through the 1:10 stock split," said Bhandari.
A 10-to-one stock split for companies on the exchange is being phased in from June 9, aiming to boost liquidity by encouraging smaller investors to buy shares. In Dubai, real estate stock pushed the index up 0.9%. The emirate's blue-chip developer Emaar Properties rose 1.6% and its unit Emaar Malls increased 4.3%.
Dubai Islamic Bank also traded 1.6% higher after its board recommended acquisition of the private lender Noor Bank. Abu Dhabi's index was up 0.8%, lifted by Aldar Properties, which rose 2.8%, and First Abu Dhabi Bank (FAB) FAB.AD, which increased 1.5%.
The lender fell 1.2% in the last session after the Qatar Financial Centre Regulatory Authority said it had imposed additional measures to restrict First Abu Dhabi's business in the Gulf state.
Egypt's blue-chip index rose, with 27 of its 30 stocks gaining and the country's largest lender Commercial International Bank adding 1.9%. Global Telecom was up 1.1% after the company on Sunday announced it had postponed its shareholder meeting to provide more time for investors to consider the mandatory tender offer submitted by major shareholder VEON.
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