MIDEAST STOCKS-Saudi’s real-estate sector set for gains on housing ministry plans
Traders work at the Egyptian stock exchange in Cairo, Egypt in this August 23, 2015 (Reuters)

DUBAI :  Saudi Arabian real-estate related shares are poised for gains on Thursday after the housing minister announced plans to build over one million homes as part of economic reform plans, while the rally in oil is set to support other Gulf markets.

The Saudi government published a five-year National Transformation Plan (NTP) on Monday, part of a wider set of reforms launched in April as “Vision 2030″.

One facet of the plan, which sets targets for government agencies and includes spending on new initiatives across various sectors, includes building 1.5 million homes over the next seven or eight years, the housing minister said at a press conference in Jeddah late on Wednesday.

Majed al-Hogail said the kingdom will offer foreign and local property developers partnership deals in a vast housing construction programme to reach that target.

Property developers Dar Al Arkan and Emaar Economic City, which skyrocketed after they announced they were in talks with the ministry to build housing units, are set to extend gains after comments from the housing minister.

Authorities will encourage the kingdom’s big landowners to involve themselves in income-generating residential development projects, and Hogail said details of a tax on undeveloped urban land would be released within two weeks. The ministry is also planning to issue a sukuk for its Real Estate Development Fund by end of 2017/2018.

Sectors linked to construction are poised to benefit, with companies in the cement sector likely to make gains. Saudi Cement and Southern Cement, two of the largest listed cement companies, are set to climb. Shares in both companies rose more than 1 percent over the last two days.

Elsewhere in the Gulf, investor sentiment has recently been lifted and gains are likely to continue as oil prices hit fresh 2016 highs. Brent oil was up 0.4 percent at $52.70 a barrel in early Asian trade.

Emirates NBD, the largest listed lender on Dubai’s exchange, said in a statement that it has “no comment” about a report in an Egyptian newspaper about the bank offering to buy Barclays Egypt, a subsidiary of Barclays Africa.

HSBC cut its target price of ENBD to 10.10 dirhams but maintained a “buy” rating. The stock closed at 8.35 dirhams on Wednesday.

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