Stock News: Saudi Bourse May Remain Under Pressure Ahead Of Eid Break

Saudi Arabia’s stock market, which slid in its last session following the announcement of a large initial public offer, may remain under pressure on Wednesday as the Kingdom prepares to celebrate the Muslim holiday of Eid al-Adha.

The main Saudi index fell 1.2 per cent on Monday, its biggest decline in three months, as investors started to set aside cash for next month’s flotation of National Commercial Bank (NCB), the kingdom’s largest bank by assets.

NCB will sell 15 per cent of its shares to the public and place a further 10 per cent with a state fund, it said on Sunday. The IPO is expected to be one of the largest ever in the Gulf region.

The bourse was closed for Saudi Arabia’s National Day on Tuesday. The country’s public sector is expected to shut down for all of next week and perhaps some of the following week to celebrate Eid al-Adha and the stock market will also be closed, though for a shorter time with exact dates yet to be announced.

That may deter local investors from opening new long positions, especially with global markets in a risk-averse mood following the start of U.S.-led military strikes against the Islamic State group.

Elsewhere in the region, Dubai contractor Drake and Scull may attract some interest after saying on Wednesday it had won a Dhs189 million ($51.5 million) contract for mechanical, electrical and plumbing work at the Al-Dara Hospital and Medical Center in Riyadh.

Also in Dubai, subscriptions close on Wednesday for retail investors in the $1.58 billion initial public offer of Emaar Malls Group, a subsidiary of Emaar Properties, and two days later for institutional buyers.

Hopes for favourable pricing lifted Emaar shares 1.3 per cent to Dhs11.8 in the last session. The stock faces resistance at Dhs12, its early September peak.