Saudi stocks gain confidence in new budget

JEDDAH — The Saudi stock market reacted positively and lent support to the new budget announced earlier before the close of daily trading Monday. The Saudi stock benchmark Tadawul All Share Index registered a 0.67% at close to 6, 992.19 points. All sectoral indices posted gains, except for  Cement, Multi-Investment, Real Estate Development, Transport, and Hotel & Tourism which incurred losses. Energy & Utilities and Industrial Investment recorded highest percentage increases at 9.84% and 1.76%, respectively. Elsewhere,  Dubai's stock market slipped early on Monday as regional investors diverted their attention to Saudi Arabia's 2016 state budget announcement, due in the afternoon, while Qatar and Abu Dhabi were steady in lethargic trade. Late on Sunday, Dubai announced plans to raise state spending by 12 percent in 2016 compared to its 2015 budget plan as it invests in infrastructure to sustain economic growth, while continuing to balance its budget. This failed to boost Dubai's stock index, which fell 0.9 percent as only one-third of listed stocks traded. Emaar Properties and Arabtec retreated 2.4 percent and 0.7 percent respectively. Abu Dhabi's bourse oscillated narrowly around Sunday's close in early trade with only six active stocks among the 61 listed. Blue chips Etisalat and Union National Bank were the only two gainers, rising 2.0 and 0.3 percent. In Qatar, the index rose 0.3 percent in thin trade as international portfolio managers were largely absent because of the year-end holiday season. Gainers outnmunbered losers seven to four with the industrial sector's Aamal Co and Qatar Islamic Bank advancing 2.4 and 1.1 percent. Oil near 11-year low once again Meanwhile, oil fell toward $37 a barrel on Monday, trading within sight of an 11-year low, pressured by excess supply that has more than halved prices since the downturn began in mid-2014. US crude was trading at around parity with global benchmark Brent, having earlier in December risen to a premium for the first time in about a year following the lifting of a 40-year-old ban on most US crude exports. Brent crude was down 71 cents at $37.18 a barrel at 1137 GMT. It fell to $35.98, an 11-year low, on Tuesday. US crude was down 91 cents at $37.19. Trading volume was lighter than normal due to a UK public holiday. “We expect both prices to rise next year,” said Eugen Weinberg, an analyst at Commerzbank. “A short-term slide can’t be excluded, due to persisting oversupplies, negative sentiment and stronger downside momentum.” Figures from the Organization of the Petroleum Exporting Countries imply a glut of more than 2 million barrels per day, equal to over 2 percent of world demand. Oversupply is expected to persist into the earlier part of next year. “The global supply and demand tables are still showing a heavy picture for the first half of 2016,” said Olivier Jakob, oil analyst at Petromatrix. Signs on Monday that a further demand stimulus from low crude prices may be limited also added pressure. In Japan, total oil product sales in November fell to a 46-year low. In Europe, demand growth for oil products turned negative in October, analysts at JBC Energy said in a report, citing figures from the Joint Organizations Data Initiative – the first year-on-year decline this year, JBC said. The drop in prices gained impetus after OPEC a year ago dropped its longstanding policy of cutting output to support prices in favor of defending market share. While the price collapse has partly achieved OPEC’s goals by curbing growth of competing supplies, it has put finances in producing nations under more strain, even in the relatively wealthy Gulf states. — SG/Agencies