Tadawul index jumps 1%

Saudi stocks rose in heavy volumes on Sunday as investors cheered the news that King Salman had issued a royal decree restoring financial allowances for civil servants and military personnel.
The allowances were reduced last September as part of austerity measures due to low oil prices. Officials said on Saturday the cuts had been canceled because of better-than-expected budgetary performance in the first quarter of 2017.
The move is likely to boost consumption, benefiting the retail and food sectors, according to economists at Al-Rajhi Capital.
On Sunday, consumer cyclical shares, which have been underperforming the market in the past year, were among the top gainers, helping push the index up 1 percent.
Electronics retailer Jarir surged 8.3 percent in its heaviest daily trading volume this year and home improvement retailer Saudi Company for Hardware (SACO) jumped 8.9 percent in unusually heavy trade.
Shares of the Gulf’s largest dairy producer, Almarai, rose 1.7 percent after reporting a first-quarter net profit of SR328.3 million ($87.55 million), up 13.7 percent from a year earlier. Four analysts polled by Reuters forecast a net profit of SR337.4 million.
Almarai attributed its improved results to better cost management, lower commodity costs and lower general expenses and said it will continue “to focus on costs control, efficiency gains and cash-flow preservation.”
Other sectors such as banks, especially those exposed to the retail segment, are also likely to benefit from the restored allowance, Al-Rajhi analysts said.
“The reversal of the allowance cut also highlights improved confidence in the economy, which is positive for the equities market in general,” said Al-Rajhi Capital.
Sunday also marks the first day of the Saudi stock exchange settling trades within two business days of execution, a practice called T+2, rather than the previous same day settlement.
In contrast to the Saudi market, other bourses in the neighboring Gulf states experienced a quiet day. Kuwait’s index edged up 0.1 percent in below 10-day average volumes, while in Qatar the index lost 0.4 percent, with petrochemicals producer Industries Qatar dropping 1.8 percent as crude oil prices fell to a three-week low on Friday.
Stock markets in the UAE were closed for a public holiday.
Cairo’s index dropped 2.8 percent to 12,544 points, it largest single-day decline since Jan. 23, as local traders exited positions with all but two of the 30 most traded shares declining, bourse data showed.
“Lack of fresh news has left the index vulnerable to a correction and this may continue, and it may test support at around 11,900 points,” said a Cairo-based trader.

Source: Arab News