Most Gulf Arab markets rose on Monday, but gains prompted by Saudi Arabia's latest $93 billion social spending plan were tempered by doubts over how this would be implemented. Saudi Arabia's index, the largest Gulf Arab market, rose 0.2 percent, having surged 4.5 percent on Sunday, with regional markets rallying after the kingdom offered $93 billion in social handouts in a bid to neuter dissent.
"I think we will have a day or two more to go, but then questions will start to come about the time frame for the Saudi stimulus and the costs associated to waste at the bureaucratic level," said Robert McKinnon, ASAS Capital chief investment officer. "Much of the stimulus is going to the people that are happy and have jobs, or own companies and land. I don't see any intent at actual reform. So it seems to me this is a PR stunt."
Market bellwether Saudi Basic Industries Corp rose 0.5 percent, but lender Samba Financial Group fell 0.9 percent. Abu Dhabi's index rose for a second day, climbing 0.5 percent, but Dubai's benchmark ended a three-session rally, slipping 0.2 percent.
With domestic news flow limited, UAE markets will look towards first-quarter earnings for direction, said Walid Shihabi, Shuaa Securities chief executive in Dubai. National Bank of Abu Dhabi and First Gulf Bank add 2.2 and 1.6 percent respectively. Property-related stocks weighed on Dubai, with contractor Drake & Scull and builder Arabtec sliding 1 and 2 percent respectively.
Unrest in Bahrain has eased in recent days. On Tuesday, the king said a foreign plot against his Sunni-led island state had been foiled, and the head of the Gulf Co-operation Council said interference by Shi'ite Iran in the Gulf Arab states would not be tolerated. Kuwait's index climbed 1 percent on slim volumes.
Telecom operator Zain rose 1.5 percent. A company source told Reuters it would sign a preliminary contract to sell its quarter-stake in affiliate Zain Saudi by next week. This deal is continuing despite the UAE's Etisalat withdrawing a $12 billion take-over bid for Zain, with the collapse of this deal sending the latter's shares 4.4 percent lower on Sunday. Zain previously proposed a 200-fils-per-share dividend, offering a 15 percent dividend yield at current prices. Oman's index climbed 0.2 percent in its third straight gain, while Bahrain's measure added 0.7 percent. Qatar index fell 0.6 percent.
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