Banking stocks lifted Saudi Arabia’s bourse in early trade on Tuesday, while Egypt continued a broad rally after positive purchasing managers’ data and comments by the International Monetary Fund.
The main Saudi index edged up 0.3 per cent, largely on the back of lenders Samba Financial Group and Banque Saudi Fransi, up 1.3 and 1.6 per cent, respectively.
The kingdom’s finance minister said on Tuesday that Saudi Arabia’s financial position was very strong despite the plunge in oil prices since last year. Ibrahim Alassaf also said the kingdom was focusing spending on economic development projects to stimulate the private sector.
The announcement late on Monday of rules covering the opening of the Saudi market to direct foreign investment from June 15 appeared to have little impact on shares.
The rules were almost identical to draft rules circulated last August, and included significant foreign ownership restrictions, including a 10 per cent ceiling on combined foreign ownership of the market by value.
Also, with stock valuations already quite high, foreigners may be cautious in entering the market over coming months.
A Capital Market Authority spokesman had said on Monday that “a number of experts and analysts expect foreign investors to enter the market gradually’’ — possibly a signal that the regulator does not want to see rapid inflows.
Egypt’s bourse rose 1.4 per cent with most stocks positive after the HSBC purchasing managers survey showed that business activity in the private sector, excluding oil, came close to stabilising in April after a three-month contraction.
A senior International Monetary Fund official told Reuters on Tuesday that Egypt’s economic policy reforms were starting to pay off and growth was strengthening, although the country still faced a difficult situation.