TASI rises on news of restored bonus; retail up 5%

The Saudi stock exchange pared gains after climbing over 7,000 in early trade on Sunday driven by Saudi King Salman’s royal decrees on restoring bonuses and allowances for public sector employees and military personnel.

The benchmark Tadawul All Share Index (TASI) was trading 1.1 percent higher at 6,983 around noon.  Trading turnover was over SAR 1.5 billion.

“We expect an improvement in consumer spending going forward with the restoration of bonuses and allowances as this will put more money in the pockets of the consumers, especially with Ramadan and Eid around the corner,” Muhammad Faisal Potrik, head of research at Riyad Capital told Argaam.

All sectors moved into positive territory with the retail sector climbing over 5 percent. Farm Superstore and Jarir Marketing were up nearly 8 percent, while SACO rose 7 percent.

“Retail stocks should react positively in the short run but we would be closely tracking spending indicators for a more accurate picture,” Potrik added.

Discretionary spending in Saudi Arabia has been squeezed in the past quarters as the austerity measures curbed consumer spending. 

Almarai shed some early gains and was trading nearly 2 percent higher at SAR 73.25. The dairy producer posted a 14 percent rise year-on-year in Q1-2017 net profit.  

Write to Brinda Darasha at brinda.d@argaamplus.com