JEDDAH: Petrochemicals and banks weigh as Saudi stock benchmark Tadawul All Share Index (TASI) eased 0.32 percent at close Monday to 6, 732.96 points. Saudi Basic Industries Corp dropped 0.5 percent and Al-Rajhi Bank slipped 0.3 percent. "Central bank data suggests deposit and loan growth by Saudi banks in the second-quarter, but first-quarter results were disappointing and the sector has been a laggard, so we're not playing it just yet," said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments. Saudi Telecom Co and Saudi Electricity rise 0.6 and 1.5 percent respectively. "In Saudi Arabia, we're particularly looking at materials - petrochemicals, fertilizer and chemicals - plus infrastructure plays, particularly the cement sector," said Arabi. "We're also making sure we have exposure to consumer discretionary stocks." Cement and consumer sectors are benefitting from a state social spending program, he added. Saudi Arabia has pledged to spend an estimated $130 billion, or around 30 percent of its annual economic output, on new houses, creating jobs, unemployment benefits and other measures, while some state and private employers gave workers a bonus of two-months' salary. The cement benchmark dropped 0.4 percent, declining for a second day since Saturday's 33-month peak. Elsewhere, foreign and local investors buy Oman bank stocks, helping the country's index edge away from Sunday's 22-month low. Bank Muscat climbed 1.4 percent, Oman International Bank (OIB) rises 0.4 percent and National Bank of Oman adds 1 percent. "There was buying from foreigners and local institutions, which gave some relief to the market," said Adel Nasr, United Securities brokerage manager. Foreign funds targeted Bank Muscat and OIB in particular, Nasr said, ahead of conventional banks launching Islamic services. "This should give them extra business in the coming two to three years," he said. The index rose 0.2 percent to 5,963 points. Volumes have hit a three-week high. "I'm still worried about the market - we had a slight rebound today, but volumes were small, although better than we've been used to recently - we will have to wait until later this week to get a clearer outlook," Nasr added. Meanwhile, Industries Qatar heads losers as Doha's index fell for a sixth session in seven, with scant interest from foreign investors and little expectations for a swift rebound. Industries Qatar dropped 1.3 percent, Commercial Bank of Qatar falls 1.2 percent and Qatar National Bank slips 0.4 percent. "There is little buying from foreigners, plus selling pressure from local individuals," said Samer Al-Jaouni, general manager of Middle East Financial Brokerage Co. "It is positive that volumes are low while the market is going down because it shows selling pressure is not that strong." The index dropped 0.6 percent to 8,321 points, taking its 2011 losses to 4.2 percent. "Q2 is not usually one of the best quarters in Qatar and after the index broke a support at 8,500 points, it looks like it is heading to the next support at 8,290," said Jaouni. "Qatar is waiting to hear whether it will get an MSCI upgrade - that seems to be the only news the market is looking for." Index compiler MSCI will announce on or around June 21 whether it will raise the UAE and Qatar to emerging market status, a move that would potentially attract billions of dollars of extra trading to local bourses. In the United Arab Emirates, Air Arabia is among gainers as Dubai's index rises for a third day since Wednesday's two-month low, with UAE markets seen stabilizing as index compiler MSCI's June review nears. Air Arabia climbs 2 percent, accounting for about a third of shares changing hands. Takaful Emarat Insurance is the top trader, rising 3.7 percent. Local speculators normally turn to the insurance sector in the absence of other news to trade and Takaful's dominance shows foreign investors are scarce. MSCI will next month announce whether it will upgrade the UAE and Qatar to emerging market status, a move that would potentially attract billions of dollars of extra trading to local bourses. "Qatar and the UAE are over-sold - the chance of inclusion into the MSCI (emerging markets index) should start to play an important role in stabilizing prices," said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments.
