Stock now exceeds level prior to Prince Alwaleed's arrest
Alwaleed's Kingdom Holding shares extend rally for second day
Shares in Kingdom Holding rose for a second consecutive day on Monday following the release of its chairman Prince Alwaleed bin Talal, as the winding down of Saudi Arabia's anti-corruption drive and upgrades stoke optimism for the country's bourse in the year ahead.
Kingdom shares rose by as much as 8.6 per cent at the open of Monday's trading session to 10.9 riyals, their highest level since mid-September. They shed gains to close up 2.5 per cent at 10.29 riyals, just ahead of the 10.28 riyals level before the start of the anti-corruption drive in early-November.
The gains came on top of a 10 per cent rise on Sunday – the stock’s best one day performance since 2014 – following the prince’s release on Saturday.
Prince Alwaleed, who was detained along with hundreds of Saudi businessmen and prominent figures in early November, maintained his innocence in an interview with Reuters on Saturday, saying discussions with the government were likely to be concluded “within days”.
Saudi stocks rallied 4.7 per cent so far this year - compared to a 0.2 per cent gain for 2017 - amid signs the country's high-profile anti-corruption drive is coming to an end, with several senior government and business figures set free.
"Investor sentiment has been positive," said a senior Saudi-based banker, who asked not to be named. The release of Prince Alwaleed and other prominent businessmen is "important with regard to the bigger investment picture in [the country] and subsequent FDI."
Appetite for Saudi equities is likely to rise further in coming months, with the country widely predicted to be granted emerging market status from key international index compilers.
"We've seen a lot of interest from local and investors recently ahead of the expected emerging market upgrades from both FTSE and MSCI," said Ali Al Adou, head of asset management at Daman Investments in Dubai. "This is going to be a catalyst for the Saudi market."
FTSE is due to announce its decision on whether to grant emerging market status to the country in March, with a decision from MSCI expected in May.
Shares in fashion retailer Fawaz Abdulaziz Al Hokair – whose founder was also released from detention on Saturday morning – opened higher but ended the day 2.4 per cent lower, after rising 6.8 per cent the previous day.