Saudi Arabia’s benchmark equity index closed at its highest level since July 2006, with gains fueled by elevated commodity prices and strong earnings.
The Tadawul All Share Index climbed 1.2% on Tuesday, with banking stocks leading gains. The gauge is the world’s eighth-best performing benchmark so far this year on a dollar-basis, rising almost 10%.
This year’s rally has been supported by a strong fourth-quarter earnings season, according to Jassim Al-Jubran, head of sell-side research at AlJazira Capital. “The market still has a good outlook for 2022” driven by the heavily weighted banking sector as interest rates rise, he said.
Soaring oil prices are supporting the macroeconomic outlook of most sectors in Saudi Arabia, Al-Jubran said.
Al Rajhi Bank, which reported earnings on Sunday, led Tuesday’s gains in the Tadawul, rising 4%. Saudi National Bank, Bank AlBilad and Riyad Bank were among other key leaders.
Qatar’s QE Index has been rallying at a similar pace to the Tadawul and is the sixth best-performing index globally this year. Qatari stocks are also getting a boost from expectations that the FIFA World Cup, which the country hosts later this year, will support earnings and the nation’s economy.
“We expect Qatar to see a catch-up rally this year as the market lagged in 2021 versus the rest of the Gulf Cooperation Council in terms of yearly gains,” said Junaid Ansari, head of investment strategy and research at Kamco Invest. The QE index is also relatively undervalued in terms of multiples.
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