Saudi Arabia’s bourse gave up early gains and turned slightly negative on Monday after modest trading volumes indicated there were no significant fund inflows from abroad on the first day that the market opened to direct foreign investment.
After rising as much as 0.5 percent in the opening minutes, the main Saudi stock index slipped 0.3 percent as most blue chips in MSCI’s provisional Saudi benchmark fell.
Saudi Basic Industries, the biggest petrochemicals firm in the kingdom, lost 0.5 percent and top lender National Commercial Bank fell 0.4 percent.
Although the Saudi market regulator has said foreign institutions can buy stocks directly from June 15, it has not so far announced the award of any licences permitting specific institutions to do so, and it is not clear when the first batch of licences will be granted.
Only one foreign institution, Ashmore Group, has publicly declared it has applied for a licence. John Sfakianakis, Riyadh-based Middle East Director at Ashmore, told Reuters on Sunday that Ashmore expected to receive it this month, but did not elaborate.
Previously, foreigners could only buy stocks in the $565 billion market, the largest in the Arab world, indirectly through channels such as swaps. Riyadh is opening the market as a way to expose companies to market discipline and diversify its economy beyond oil.
Elsewhere in the Middle East, Egypt’s bourse was nearly flat as heavyweight Commercial International Bank (CIB) retreated from technical resistance in the 59.01-59.20 Egyptian pounds area, where it peaked in March and May. The stock was still up 0.7 percent on the day at 58.63 pounds. Arabian Business