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Reuters
Shares of car insurance and rental companies rallied on the Saudi Arabian stock market on Wednesday after news that women would be allowed to drive, although the broader market was flat.
Qatar’s stock market fell sharply, ending a six-day winning streak. Saudi King Salman issued a royal decree lifting the driving ban; it will be implemented by June 24, 2018, according to state news agency SPA. There are almost 10 million women, including foreigners, over the age of 20 living in the kingdom, and the driving ban deters many from working. It is not yet clear how the new policy will be implemented, but fund managers were encouraged by Riyadh’s willingness to push the driving reform.
“We believe it is just part a series of changes that will come forth in the coming months, and also believe that these changes will have huge implications for the Saudi economy and some particular sectors such as banking, insurance, retail,†said analysts at Oman-based Ubhar Capital. Among expected reforms, value-added tax is to be introduced in January.
Shares in most firms that provide auto insurance rose on Wednesday, including Alrajhi Co for Cooperative Insurance , which surged 6.8 percent in its heaviest trade since May.
Car rental company United International Transportation (Budget Saudi) jumped 4.0 percent and car servicing firm Saudi Automotive Services climbed 1.6 percent. Most of the large auto dealers are privately held companies, including Abdulatif Jameel, which owns Toyota in kingdom. The main Saudi stock index, however, edged down 0.1 percent as investors worried that index compiler FTSE might issue a negative decision when it determines whether to upgrade Riyadh to emerging market status at the end of this month.