Key Saudi stock index outperforms the region

JEDDAH: Stock markets in the Middle East most exposed to foreign fund flows followed global shares lower on Thursday, while Saudi Arabia’s Tadawul All-Share Index (TASI), dominated by local investors, outperformed the region for the day and the week.
TASI lost 0.1 percent with trading volume shrinking by a little over a half from the previous session. Forty shares rose, 106 declined. However, the index outperformed Gulf peers for the week with a 0.8 percent gain.
Of the 20 most valuable companies, eight declined and the same number rose. Saudi Arabian Mining (Maaden) closed 0.5 percent higher.
Combined net profits of listed Saudi companies grew 37 percent from a year earlier in the first quarter, but that was almost entirely due to petrochemical firms, which benefited from higher oil and product prices.
The market’s valuation has risen to 14.6 times forward earnings from 11.3 times in the first quarter of 2016.
“The valuation expansion outpaced earnings growth,” said Mohammad El-Haj, macro strategy analyst at EFG Hermes.”
“The market is now trading at a premium to most other regional markets and we believe petrochemicals are now fully valued. The banking sector offers some value, as it is trading slightly below fair value.”