Saudi real estate stocks hit 10-month high
Riyadh, March 24, 2013
The share index of Saudi Arabian real estate firms on Sunday climbed to a 10-month high on bets the sector will benefit from a new mortgage law being introduced.
In late February, the kingdom's government issued final regulations on real estate financing, leasing and supervision of financial companies as part of a planned mortgage law, which should help rectify a significant housing shortage in Saudi.
Developers Taiba Holding and Makkah Construction and Development rally 8.7 and 2.4 percent respectively. Jabal Omar climbs 2.4 percent.
"Taiba is an excellent company in terms of valuations and growth but there is no fundamental reason behind this move," says Mohammad Omran, a Riyadh-based independent financial analyst. "People are speculating on the mortgage law, which presents a short-term opportunity."
Omran said that while the application of the law will be gradual, other sectors such as banks and cements should also benefit.
Bottom-line impact from the long-awaited mortgage law could take months, analysts say.
The real estate sector index rises 1.5 percent to its highest level since May 2012, outperforming the main benchmark, which gains 0.5 percent to 7,129 points.
Elsewhere, UAE markets end lower in muted trade as investors await first-quarter results. Dubai's measure slips 0.6 percent to 1,898 points and Abu Dhabi's index eases 0.06 per cent to finish at 2,993 points.
Qatar's bourse ends 0.3 percent lower at 8,579 points. The index has traded within a 65-point range for the last week, signalling a lack of momentum.-Reuters