JEDDAH — Most stock markets in the Gulf rose on Wednesday after oil prices jumped for a second day in a row and Dubai led gains, lifted by speculative buying. Brent crude rose above $66 per barrel after a report of falling US inventories and signs that US oil production growth was leveling off after several years of very sharp increases. Saudi stock benchmark Tadawul All Share Index climbed 0.5 percent to 9,542 points as most stocks rose. Saudi Basic Industries (SABIC), the largest petrochemicals company in the kingdom, gained 1.0 percent. SABIC's earnings are sensitive to oil prices. Index compiler MSCI said late on Tuesday it would seek feedback from investors on the accessibility of Saudi Arabia's market following its opening on June 1, and gather information before considering whether to add the Saudi index to the review list for potential inclusion in its emerging markets index. Some analysts saw this message as positive, while others said it was likely to delay Saudi Arabia's inclusion from the initially expected mid-2017. "This means that the 2017 accession date for Saudi Arabia to join the MSCI EM index is less likely now, since the process of joining the MSCI EM index takes a minimum of two years from the point at which consultation begins," said Simon Kitchen, head of strategy at EFG Hermes. But some said the kingdom could still be fact-tracked, especially after MSCI said it could change the status of Chinese domestic shares before the next annual review. "MSCI can always choose to make changes outside the regular review schedule, as, for example, in the case of China A-shares," VTB Capital said in a note. The index compiler also did not mention Egypt in its statement. That was a relief to investors who had feared it might be downgraded from emerging market status, being represented by just three stocks since the exclusion of Telecom Egypt last month. Elsewhere, trading activity in the Gulf focused on Dubai where trading volume was the highest in 13 months and the main index jumped as much as 3.0 percent during the day before settling 1.8 percent higher to 4,187 points. Amlak Finance surged the daily 15 percent limit for the sixth day in a row. The stock started trading again last week after a six-year suspension during which it restructured debt. "It is purely a momentum play where traders are not interested in the company's fundamentals," NBAD Securities said in a note. Another favorite with retail investors, builder Arabtec, rose 12.3 percent and was the most traded UAE stock. After repeated delays, Egypt said in May that it was about to finalize a deal with Arabtec on a $36.7 billion housing project. Developer Union Properties surged 10 percent, although the company made no announcements. "This movement is a bit surprising, especially just before Ramadan," said Sebastien Henin, head of asset management at The National Investor in Abu Dhabi. "What we can guess by looking at the profiles of these companies - high beta, low face value, very liquid names - is that retail investors are very active. There's a lot of speculation. If you look at the news flow, there is nothing to justify these movements." Ramadan is due to start around June 18. Market trading often slumps during the Muslim holy month. Qatar's index was the weakest in the Gulf, sliding 0.9 percent to 11,837 points and indicating that the market remained jittery as Switzerland and the United States investigated alleged corruption at world soccer body FIFA. The Doha government has denied any wrongdoing in its winning bid to host the 2022 soccer World Cup. The Cairo index rose as much as 1.1 percent during the day but gave up all gains and closed 0.3 percent lower after reports showing inflation sped up in May. This made it less likely that the central bank would start adjusting the Egyptian pound's exchange rate any time soon, for fear of aggravating price increases. — SG/Reuters
