DUBAI: Middle East fund managers have become more positive toward Saudi Arabian equities after authorities launched a sweeping crackdown on corruption, a monthly Reuters poll showed on Thursday.
Forty-six percent of funds now expect to raise their allocations to the Saudi stock market in the next three months and none to reduce them, according to the poll of 13 leading managers, conducted over the past week.
That is the most bullish bias toward Saudi stocks since July, and compares with ratios of 31 percent and 8 percent in last month’s poll.
The crackdown alarmed the stock market because of its potential to damage the economy and undermine companies linked to suspects.
As a result, foreign investors were net sellers of stocks in the first three weeks of this month, exchange data shows. They were also concerned by rising tensions between Saudi Arabia and Iran, fueled by instability in Lebanon.
But many fund managers said they were looking past the short-term instability caused by the corruption crackdown to possibilities created by Saudi Arabia’s economic reform program, including privatizations, big new development projects and the plan to lift a ban on women driving next year.
“The crackdown on corruption that we witnessed earlier this month, along with escalated tensions between Iran and Saudi, pushes us to be cautious about our overall Saudi exposure,” said Dubai’s Arqaam Capital.
However, it added: “Short-term uncertainties are concerning, but our long-term view is net positive when putting together reform initiatives and liberalization efforts.”
The non-oil part of the Saudi economy is barely growing this year and is not expected to fare much better next year because of the planned introduction of a 5 percent value-added tax.
But the government is expected to increase spending on development projects moderately in 2018 — perhaps relying in part on funds recovered in the corruption crackdown — so some funds are starting to look toward an economic recovery in 2019.
Sachin Mohindra, portfolio manager at Abu Dhabi’s Invest AD, said that while economic, regulatory and social reforms in the region as a whole would sustain growth in the long term, for now “we expect regional investors to continue to exercise a lot of caution and volumes to remain subpar relative to history.”
Mideast funds positive on Saudi Arabia after corruption crackdown
Mideast funds positive on Saudi Arabia after corruption crackdown
Closing Bell: Saudi main index slips to close at 11,228
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, lost 23.17 points, or 0.21 percent, to close at 11,228.64.
The total trading turnover of the benchmark index was SR2.99 billion ($797 million), as 170 of the stocks advanced and 82 retreated.
On the other hand, the Kingdom’s parallel market Nomu gained 449.38 points, or 1.90 percent, to close at 24,093.12. This comes as 43 of the stocks advanced while 27 retreated.
The MSCI Tadawul Index lost 6.07 points, or 0.40 percent, to close at 1,511.36.
The best-performing stock of the day was Obeikan Glass Co., whose share price surged 7.54 percent to SR27.66.
Other top performers included Alamar Foods Co., whose share price rose 6.80 percent to SR47.10, as well as Saudi Kayan Petrochemical Co., whose share price climbed 6.79 percent to SR5.66.
Saudi Investment Bank recorded the steepest drop, falling 3.21 percent to SR13.56.
Jahez International Co. for Information System Technology also saw its share price fall 3.15 percent to SR13.55.
Rabigh Refining and Petrochemical Co. declined 2.78 percent to SR7.34.
On the announcements front, Tanmiah Food Co. reported its annual financial results for the period ending Dec. 31. According to a Tadawul statement, the company recorded a net loss of SR18.8 million, compared with a net profit of SR95.8 million a year earlier.
The net loss was mainly due to ongoing market challenges that resulted in continued pricing pressures in fresh poultry, inflationary cost pressures, higher financing expenses, and depreciation and ramp-up costs from new facilities, partially offset by increased production volumes and cost-optimization initiatives.
Tanmiah Food Co. ended the session at SR58.20, up 3.72 percent.
United International Holding Co., also known as Tas’heel, announced its annual financial results for the period ending Dec. 31. A bourse filing showed the company recorded a net profit of SR273.64 million in 2025, up 23.05 percent from 2024, primarily driven by a 23.4 percent rise in revenues. The revenue growth helped lift gross profit by 23.7 percent.
Tas’heel ended the session at SR146.80, down 0.28 percent.
