Saudi stocks rallied, putting them on track to be the Middle East’s best performers in 2020, a day after the OPEC+ group pledged a more hands-on approach to the oil market. Equities in Dubai were among the region’s best performers amid optimism over a rebound in tourism.
The main index in Riyadh gained 0.3% as of 10:20 a.m. local time Sunday, closing in on its highest level since July 2019. Gauges in Dubai, Abu Dhabi, Kuwait, Qatar and Bahrain rose between 0.2% and 1.1%. The volume of shares traded in all markets was below the 30-day average ahead of the holiday season.
Positive sentiment prevailed as OPEC+ said it will react faster to changes and take a more hands-on approach with the oil market by starting regular monthly meetings. More frequent conferences mean policy makers in oil-producing countries will drive the market, not speculators, Saudi Energy Minister Prince Abdulaziz bin Salman said on Saturday.
The Tadawul All Share Index is up just over 4% in 2020, more than any other in the Gulf, despite a slump in the price of crude since the start of the pandemic. Saudi shares have been recovering amid optimism that vaccine rollouts will provide a long-awaited boost to oil demand. About 300,000 people already registered to take the Covid-19 vaccine in the country.
Loose monetary policy in Saudi Arabia, high liquidity among investors and companies taking steps to save cash to retain investors’ confidence helped boost the biggest stock market in the Middle East in 2020, according to Joice Mathew, head of equity research at United Securities in Muscat.
“After the initial hiccups and uncertainties related to low oil prices in April, investor sentiment was boosted in an unprecedented manner,” Mathew said. He added that a weaker dollar, stronger oil price and vaccine developments are “an excellent recipe for continuation of the investor confidence and momentum.”
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