Saudi Arabian Mining Co (Ma'aden) jumped to a three-month high on Thursday after the company secured a major loan, while most Middle East shares firmed as a steady oil price encouraged bargain hunters. Ma'aden shares were up 5.5 percent after local, regional and international banks committed to a 11.5 billion riyal ($3.1 billion) loan for its phosphate business, replacing existing debt on more favourable terms.
Riyadh's Tadawul index rose 1.2 percent in its third session of gains in the four days since it hit a two-year low on Sunday. A marginal recovery in oil prices, with Brent crude up 0.25 cents to 44.25 dollars per barrel at 1232 GMT, helped lift Saudi petrochemical shares. Saudi Basic Industries Corp (SABIC) gained 2.1 percent.
"Saudi market valuations are attractive," said Mohammed Al Shammasi, chief investment officer of Riyad-based Derayah Financial, though the market would continue in a wait-and-see mode until there is more clarity on the government budget due in December. UAE markets also rose, driven by buying in stocks usually targeted by retail traders. Dubai contractor Arabtec jumped 5.3 percent, trimming year-to-date its loss to 57 percent.
Dubai's benchmark climbed 2.9 percent, making its biggest one-day gain in three months, as investors, encouraged by a positive global backdrop, bought beaten-down shares that offer fundamental value. Hootan Yazhari, head of MENA and Frontier Markets Equity Research at BofA Merrill Lynch, said in a report UAE shares selectively offer attractive long-term investment opportunities based on robust macro-economic prospects, valuations, consistent earnings delivery and superior earnings growth.
"There are broad-based buying opportunities, but stock selection is becoming key," he said, while noting prolonged low oil prices and regional geopolitical threats remain primary risks for Gulf markets. Dubai's measure was up for a third session since Sunday's 11-month low, but still down 13.3 percent year-to-date. Abu Dhabi's index climbed 1.5 percent, also up for a third session since Sunday's 11-month low.
Most Egyptian shares rose after the World Bank said it expected to make a $1 billion development policy loan available to the country next month. It said the loan could be the first of three under a three-year programme. Cairo's benchmark index advanced 2.4 percent, recovering from Tuesday's near-two-year low. Egyptian sentiment was hammered in recent weeks by security concerns, These were exacerbated after a bomb claimed by Islamic State brought down a Russian airliner in Sinai on October 31, killing all 224 people aboard.
Despite local worries, Egyptian institutional investors were net buyers, while non-Arab foreigners were net sellers.