Time to Buy Saudi Stocks? Some Investors Look at Dubai Instead - Bloomberg:
Saudi Arabian stocks are about to join major emerging-markets benchmarks, gaining the attention of many money managers for the first time. But some investors familiar with markets in the Gulf say that Dubai offers bigger potential gains.
That’s because the biggest stocks in Riyadh have been rallying in anticipation of their inclusion in the gauges, compiled by FTSE Russell and MSCI Inc., in several tranches starting this month. Dubai’s market, on the other hand, has been battered in the past year by concerns mostly tied to its real estate market, a pillar of its economy.
Saudi shares have historically traded at a premium to Dubai’s, in terms of estimated price-to-earnings. But the gap between them reached the widest since 2010 in February. The Dubai Financial Market General Index was the worst-performer globally last year among major gauges tracked by Bloomberg, while the Saudi peer was among the 10 best. Dubai’s main index fell 0.1 percent as of 12:08 a.m. local time, while the peer in Saudi was little changed.
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