Tadawul hits a high after govt pledge to clear dues

Saudi Gazette report Riyadh — The Saudi stock market rose to its highest level since August on Tuesday after the announcement by the Council of Economic and Development Affairs (CEDA) that all government dues owed to private sector firms will be cleared before the end of 2016. The Tadawul All Share Index rose 2.2 percent to 6,333.54 as of 1:47 p.m. in Riyadh, with 156 of the benchmark’s 175 members climbing. Financial stocks led gains, with a gauge of the nation’s 12 lenders rising 2.9 percent. Equities in Saudi Arabia have advanced 13 days out of 15 since the Arab world’s largest economy raised $17.5 billion in a bond sale last month. “The announcement that contractors will be paid is good news for the market, gives it a timeframe to work with and adds to existing positive sentiment,” Mohammed Alsuwayed, the Riyadh-based head of capital and money markets at Adeem Capital, told Bloomberg. The Tadawul’s 14-day relative strength index stayed above 70 for a second day. Shares in Al Rajhi Bank rose for a 17th session to SR61.50, the highest level since April. Samba Financial Group advanced 4.7 percent and National Commercial Bank was up 1.8 percent. News of the clearance of dues brought smiles to the faces of hundreds of expat workers. The arrears have left tens of thousands of foreign workers, chiefly in the construction sector, struggling for months while they await back wages. “The Council came up with a package of solutions and procedures to settle the dues that met the requirements of spending,” the Saudi Press Agency reported after a regular meeting of the Council of Economic Affairs and Development. Solutions “will be implemented immediately and completed before December 2016”, it said. The Council discussed “the necessary procedures to pay the amounts owed to the private sector from the public treasury,” SPA said. “The payment was late due to the sharp decline in oil revenue and the measures taken by the Kingdom to reduce spending on a number of projects.”