DUBAI, June 24 (Reuters) - Saudi stocks rose early on Sunday, still riding the wave of MSCI’s announcement last week that it would add the kingdom’s stock market to its emerging markets benchmark, but trading was largely flat in the rest of the region.
Saudi Arabia’s addition came after another index provider, FTSE Russell, gave Saudi Arabia emerging market status earlier this year. The Saudi index is up nearly 14 percent this year, the best performing index in the Gulf region.
MSCI’s move could help attract $40 billion from foreign funds, the chairman of the Saudi Capital Market Authority told Reuters last week.
On Sunday, the Saudi index was up 1 percent in the first hour of trading, with some petrochemical companies also benefiting from a rise in oil prices after OPEC decided on only modest increases in crude production last week.
Stocks in the insurance sector were also up on hopes that insurance volumes will rise as women began driving on Sunday, after the ban on woman driving was lifted. SABB Tafakul jumped 6.1 percent, followed by Al Rajhi Company for Cooperative Insurance and Trade Union Cooperative Insurance Co which gained 3.9 percent and 3.7 percent respectively.
Saudi Investment Bank gained 0.3 percent after announcing on Sunday that it has agreed to buy JPMorgan’s stake in the bank at 13.5 riyals per share as treasury shares. The lender also said it has no intention to reduce its capital through the deal.
Outside of Saudi, Gulf markets were broadly unchanged. In Dubai, where the index was 0.1 percent higher, Air Arabia rose 1 percent.
Shares in the airline, which said last week it had an exposure of more than $300 million to Dubai-based private equity Abraaj, have lost more than 10 percent since it announced last week it was moving to protect its investments in the embattled buyout firm, which has filed for provisional liquidation.
Last week, the United Arab Emirates’ top securities regulator asked UAE-listed companies to declare their exposure to Abraaj, the watchdog’s chief executive told Reuters.
In Abu Dhabi, Dana Gas jumped 1 percent after its shareholders approved last week the issuance of new sukuk to replace existing sukuk issued in 2013. The shareholders also approved the dismissal of sukuk-related litigation, marking the end of a protracted legal battle between the firm and its creditors. (Reporting by Davide Barbuscia)