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Dubai: Saudi Arabia's stock market rose for a fourth trading day on Saturday as the market operator began naming investors holding stakes of five per cent or more to boost transparency on the largest Arab bourse.
The Saudi benchmark, which has fallen more than 24 per cent this year, advanced 1.75 per cent to 8,331.63 points as investors snapped up shares they judged were cheap relative to earnings expectations.
The index has risen 5.7 per cent in the last four trading days, having dropped almost nine per cent in the seven sessions after market operator Tadawul said on July 30 it would name large investors at the end of each trading day from Aug. 16.
"The positive sentiment is due to the new disclosure rules but also because some of these stocks are very attractive now," said John Sfakianakis, chief economist at SABB bank, HSBC's Saudi affiliate.
Tadawul said last month it was implementing the rule to improve transparency. The Saudi market is dominated by day traders and restricts foreign access to shares.
The disclosure rule could help the regulator dispel rumours that big retail traders are behind rapid fluctuations in share prices, a common assumption in the market, Sfakianakis said.
Data on the bourse website showed about 60 individuals hold stakes of more than five per cent in listed firms, including 10 investors with 70 billion riyals ($18.67 billion) of stakes in banks.
"The disclosures demonstrate that at least for the big companies, the ownership is not just the well-known investors in the market," Sfakianakis said.
The Saudi Public Investment Fund is the largest investor in the Saudi stock market, with holdings in 18 firms worth 376.9 billion riyals as per closing prices Wednesday, data showed.
The General Organisation for Social Insurance held shares in 25 firms worth 82.2 billion riyals, the Public Pension Agency 15.7 billion riyals and the Saudi Arabian Monetary Agency - the central bank - 3.04 billion riyals.
"The state, especially in the banking sector, continues to have an important ownership position with about 19.6 per cent of the 11 listed banks," Sfakianakis said. The private sector owns about 22 per cent in banks, he added, citing bourse data.
A downturn in the Saudi stock market - the Gulf region's worst performer this year - has made many stocks attractive.
Banque Saudi Fransi added 3.47 per cent to 74.50 riyals, a discount to Global Investment House's 97.3-riyal target, while Samba Financial Group - in which the state owns 44.4 per cent - rose 1.15 per cent to 65.75 riyals.
Global's target price for Samba's stocks is 77.6 riyals. Almarai shares also rose 4.28 per cent after the dairy company said it had signed an initial deal to buy an Egyptian food company as part of expansion plans.
The full impact of new disclosure rules, meanwhile, would not be apparent until investors return from summer holidays, Sfakianakis added.
The disclosures now show names of companies owning major stakes in listed firms - but not the names of the owners of such firms.
"We could have the creation of dummy companies looking for loopholes in the rules, so the next step will be to also show the names of the owners of these legal entities," said Sfakianakis.
Ramadan: Shortened trading days
Daily trading hours at Saudi Arabia's stock market will be shortened by 30 minutes during Ramadan, market operator Tadawul said on Saturday.
The Saudi bourse will be open from 11am local time (0800 GMT) to 3pm (1200 GMT) during the month of fasting, which coincides with the month of September this year.
The fast begins at the sighting of the new moon.
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