Mideast Stocks: Saudi Stocks Soar to 5-Year High on Foreign Ownership Reform Hopes

Saudi stocks rallied sharply on Wednesday following news that the Capital Market Authority (CMA) is considering allowing foreign investors to own majority stakes in listed companies, while UAE markets extended losses on broad weakness.

Saudi Arabia's benchmark index surged 5.1%, recording its biggest single-day gain in more than five years, on market-wide strength after Bloomberg News reported regulators may ease the current 49% cap on foreign ownership of listed firms, a move expected to draw fresh foreign inflows in the region’s largest equity market.

Shares of Al Rajhi Bank, the world’s biggest Islamic lender, climbed 10%, hitting the exchange’s daily limit and marking the steepest gain in nearly two decades. Saudi National Bank also rose 10%, its largest advance since its 2014 listing.

The potential rule change may trigger over $10 billion in foreign inflows and lead MSCI to raise Saudi Arabia’s index weights, boosting demand and valuations, said Daniel Takieddine, co-founder and CEO of Sky Links Capital Group.

However, Oil behemoth Saudi Aramco eased 0.2%, after talks to acquire a minority stake in Spanish energy firm Repsol’s renewables unit hit an impasse over a potential 1 billion euro ($1.2 billion) investment, two sources familiar with the matter told Reuters.

Dubai's main share index fell 1.5%, , with all sectors lower on profit-taking after a failed rebound. Emaar Properties slipped 2.5% to a three-month low, while Emirates NBD Bank lost more than 1.5%. National Central Cooling dragged on utilities, down 3% after trading ex-dividend.

In Abu Dhabi, the benchmark declined 1.3%, erasing much of its recent recovery. Aldar Properties fell 2.6% to a more-than two-month low, while ADNOC Gas dipped 0.6%. A drop of more than 1% in Dubai and Abu Dhabi reflected reaction to possible Saudi regulatory changes, said Mohammed Ali Yasin, CEO of Ghaf Benefits at Lunate.

Qatar's stock index ended 0.9% lower, its fourth straight decline, as Qatar Islamic Bank slid over 2% and Qatar National Bank fell 1.1%. Outside the Gulf, Egypt's blue-chip index jumped 1.8%, building on the previous session's gains, boosted by a 3.2% jump in Commercial International Bank.

SAUDI ARABIA surged 5.1% to 11,426

ABU DHABI fell 1.3% to 9,978

DUBAI dropped 1.5% to 5,872

QATAR shed 0.9% to 11,079

EGYPT climbed 1.8% to 35,949

BAHRAIN was flat at 1,948

OMAN advanced 0.5% to 5,114

KUWAIT declined 0.9% to 9,424