MIDEAST STOCKS-Saudi banks lifted by end of contract freeze for debt-laden builder – Reuters

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* Bank stocks rally lifts Saudi index from two-week low

* Petrochemicals also gain after oil price jump

* Egypt ends four-session losing streak with 1.4 pct gain

By Matt Smith

DUBAI, May 5 Banking stocks helped Saudi
Arabia’s index rebound from a two-week low on Thursday
after the government ended builder Saudi Binladin Group’s ban on
bidding for state contracts, potentially easing the strain on a
company heavily in debt to local lenders.

Binladin, which was barred from new government contracts
last Septmber after a deadly crane accident in Mecca, has now
received a royal decree permitting it to bid for state contracts
again, a Binladin executive told Reuters, declining to be named
because of briefing rules.

A travel ban imposed on the company’s top managers has also
been lifted, the executive said.

National Commercial Bank and Al Rajhi Bank
were among the biggest gainers, rising 1.6 percent and
1.3 percent respectively.

“Binladin is a big borrower and worries about the company
had been pressuring the banking sector,” said Mazen al-Sudairi
of Riyadh-based Al Istithmar Capital. “There is less risk
associated with Binladin now.”

The banking sector index, which represents about a
third of the bourse’s total market capitalisation, rose 1.3

Binladin, one of the Middle East’s largest construction
companies, has declined to describe its financial situation
publicly, but Gulf bankers have said it is believed to owe local
and international banks about $30 billion.

Overall, the building and construction sector accounts for
7.9 percent of total lending among Saudi banks, central bank
data shows.

Saudi’s main index rose 1.1 percent, its first gain in six
sessions trimming losses since hitting a 16-week high on April
25 to 3.1 percent.

The petrochemical sector, the bourse’s
second-largest behind banking, was also supportive. It rose 2.4
percent as Brent crude oil jumped 3.5 percent to
$46.16. Brent is up by nearly two thirds since January’s 12-year


In Egypt, Cairo’s benchmark index rose 1.4 percent,
rallying from a three-week low as telecoms stocks helped to end
a four-session losing streak.

Investors had sold off stocks ahead of a four-day holiday
last weekend and the trend continued after the market reopened
on Tuesday.

“We’re seeing a rebound as bargain hunters come in to take
advantage of lower prices,” said Mohamed Radwan, head of
equities at Pharos Securities in Cairo.

He predicted the recovery will be short-lived, with the
bourse likely to remain volatile. It is up 15 percent since
mid-March’s devaluation of the Egyptian pound.

Global Telecom and Telecom Egypt climbed
1.5 percent and 2.7 percent respectively.

Other Gulf markets were closed for a religious holiday.



* The index rose 1.1 percent to 6,656 points.


* The index climbed 1.4 percent to 7,547 points.

(Editing by David Goodman)

MIDEAST STOCKS-Saudi banks lifted by end of contract freeze for debt-laden builder – Reuters}