Sudanese shares surge on lifting of US sanctions

Drake and Scull among the leaders in the Dubai

Drake & Scull which reported a loss of 1.18 billion dirhams in 2017 confirmed on Wednesday financial violations by former management. Rich-Joseph Facun / The National

Shares of Sudanese companies listed in the United Arab Emirates soared yesterday after the United States said it was lifting sanctions on Sudan, while construction firm Drake & Scull led Dubai higher.

In Abu Dhabi, Sudatel Telecom rose by its 15 per cent daily limit to 0.69 dirham, its highest level since April, in heavy trade. A Dubai-listed Sudanese bank, Al Salam Bank Sudan, also gained 15 per cent but in much smaller trading volume.

Citing progress on counter-terrorism and improvement in human rights, Washington lifted 20-year-old sanctions against Sudan that had effectively cut the country off from much of the global financial system, raising costs and risks for Sudanese firms.

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The Dubai index rose 0.6 per cent as Drake & Scull , the most heavily traded stock, surged 4.7 per cent. The stock has been rising sharply since last Wednesday after it completed a capital restructuring that involved Tabarak Investment receiving 500 million new shares.

Investment bank Shuaa Capital jumped 5.6 per cent, also in unusually heavy trade. It had been hovering near its lowest levels for this year.

Saudi Arabia's index fell 0.9 per cent as petrochemical shares weakened after a drop in global oil prices at the end of last week; Saudi Basic Industries lost 1.1 per cent.

But National Agriculture Development Co climbed 3.8 per cent after saying it had signed a memorandum of understanding with dairy firm Al Safi Danone Company, a partner of France's Danone, to examine the possibility of NADEC acquiring Al Safi in a deal which would leave current Al Safi shareholders owning 38.75 per cent of NADEC.

Top Saudi dairy producer Almarai, which could eventually be hurt by stiffer competition from the merged company, dropped 2.0 per cent.

Qatar's index, which had tumbled as much as 1.6 per cent during the day to just above 8,000 points, rebounded sharply towards the close and finished 0.1 per cent higher. But the most heavily traded stock, Vodafone Qatar, lost 3.4 per cent.

The index has sunk to five-year lows in recent days because of sanctions imposed on Qatar by other Arab states. Partly because of the sanctions, data last week showed Qatar's economy grew in the second quarter at its slowest rate since the global financial crisis.

On Saturday the government announced measures to help private sector businesses, such as rent reductions in Qatar's logistics zones, but it was not clear that this would do much to revive weak business sentiment.

Egypt's index gained 0.8 per cent on the back of a 10 per cent leap by Arab Cotton Ginning.