JEDDAH — Saudi Arabian stocks rose sharply on Monday after the central bank raised banks' maximum loan-deposit ratio, while most other bourses in the region were buoyed by a rebound of global markets.
The Saudi central bank, seeking to ease tightening liquidity caused by low oil prices, increased the ratio of deposits that commercial banks can lend out to 90 percent from 85 percent, industry sources told Reuters.
That may not make much difference in the long term to the pressures on Saudi banks, which face deteriorating credit quality as the economy slows as well as demands on their funds from heavy government bond issuance. The three-month Saudi interbank offered rate edged up on Monday to 1.73125 percent from 1.72875 percent.
But the central bank's move was a welcome effort by authorities to support the economy, and the Saudi banking stock index climbed 2.1 percent.
The overall Saudi equities index rose 2.4 percent to 5,691.25 points as petrochemical giant Saudi Basic Industries gained 3.1 percent. Major real estate developer Dar Al Arkan rose 2.3 percent.
But Arabian Cement dropped 1.8 percent after it said it was proposing a cash dividend for the second half of 2015 of SR2.5 per share, down from SR3.25 a year ago.
Real estate stocks buoyed Qatar's bourse after strong earnings from United Development Co, the most heavily traded stock, which jumped 6.7 percent in its highest volume since last July.
The company reported a 10.2 percent rise in 2015 net profit and recommended a dividend of SR1.5 per share, up from SR1.25 a year earlier. Other real estate shares rose in sympathy, with Barwa Real Estate gaining 7.7 percent, and the overall Qatari index surged 2.7 percent.
Dubai's index fell 0.3 percent to 3,004 points as DAMAC Properties slipped 0.8 percent and builder Drake & Scull , which had risen on Sunday because of better-than-expected fourth-quarter earnings, fell back 0.9 percent.
Islamic Arab Insurance Co fell 2.9 percent in unusually heavy trade after it posted a 162.8 million dirham ($44.4 million) net loss for 2015 compared to a 36.7 million dirham profit in 2014.
But shipper Gulf Navigation rose 3.5 percent after it reported that its profit doubled last year.
Telecommunications firm du fell sharply in early trade after reporting a 10.1 percent fall in fourth-quarter profit, but it closed flat.
Shares in du's bigger rival, Abu Dhabi-listed Etisalat, rose 1.3 percent after it posted a 2.7 percent rise in quarterly profit. The Abu Dhabi index rose 0.8 percent to 4,107 points.
In Egypt, the stock index also gained 0.8 percent to 5,800 points as billionaire Naguib Sawiris's Orascom Telecom surged 3.7 percent.
Beltone Financial soared 10 percent for a third straight trading day. Commercial International Bank accepted Sawiris's bid to buy its investment arm CI Capital, market sources said on Sunday; Orascom plans to merge CI Capital with Beltone.
Giza General Contracting jumped 7.5 percent in heavy trade after a disclosure statement showed a purchase of 1.17 million shares in it by a related party.
Qatar index surged 2.7 percent to 9,857 points. Oman index fell 0.3 percent to 5,350 points. Kuwait index edged up 0.2 percent to 5,139 points. Bahrain index edged up 0.1 percent to 1,167 points. — SG/Agencies
