Saudi index rises as government winds down graft purge; most other ME bourses weak

Saudi Arabian stocks rose on Tuesday as the government indicated it was winding down its crackdown on corruption, while most other major Middle Eastern bourses were weak. The Saudi stock index closed 0.8 percent higher on active volumes after the government's announcement in late trade. The statement said 56 people were now detained in the purge, down from well over 100 at one stage, and that authorities had reached their target of securing $100 billion of financial settlements from suspects.
It is not clear that the government will get any quick infusion of cash: most of the settlements involve real estate or other illiquid assets. Nevertheless, the settlements may give Riyadh more resources to spend on economic growth this year, and investors welcomed news that the purge, which unsettled the business community, appeared close to being concluded.
Al Rajhi Bank, a top lender, rose 2.2 percent. National Medical Care jumped 5.7 percent after reporting fourth-quarter net profit of 30.7?? million riyals ($8.2 million), swinging from a year-earlier loss of 69.7 million riyals. Investment firm Kingdom Holding, which had risen sharply in the previous two days after owner Prince Alwaleed bin Talal was released in the purge, fell back 1.9 percent.
The Dubai index slipped 0.4 percent as Dubai Islamic Bank tumbled 4.6 percent. Its board called an annual general meeting for February 21 to approve a proposed capital increase via issuance of up to 1.65 billion new shares; the bank currently has 4.9 billion outstanding shares. Bahrain's Ithmaar Holding, which listed in Dubai on Monday, shot up by its 15 percent daily limit to 0.87 dirham in heavy trade. Its Bahrain-listed shares surged 10.3 percent to 21.5 US cents, equivalent to 0.77 dirham.
Qatar's index fell 1.3 percent and drilling rig provider Gulf International Services, which has risen sharply in the past two months on climbing oil prices, dropped 5 percent. But Qatar Commercial Bank rose 0.7 percent to 28.40 riyals after reporting that annual net profit rose 21 percent. It proposed a one riyal per share dividend for 2017, compared to a 1-for-20 bonus share issue for 2016.
QNB Financial Services kept its market perform rating on the stock with a target of 29.00 riyals, saying that while the cash dividend was a positive surprise, asset quality remained under pressure.