DUBAI: Expectations for inflows of foreign funds in coming months boosted Saudi Arabia’s stock market to a multi-year high on Sunday.

The Saudi index surged 1.8 percent, its biggest daily gain since last June, to 7,696 points, its highest finish since November 2015.

Investors expect a positive decision by index compiler FTSE at the end of March on whether to upgrade Riyadh to emerging market status, and a similar decision by MSCI in June. Together, the decisions could attract tens of billions of dollars of new foreign money to the market in the next 18 months.

Inflows have started in the past few months in anticipation of positive index decisions, and exchange data released after the close on Sunday showed foreign investors were net buyers of Saudi stocks last week to the tune of $115 million.

Petrochemical producers and banks, where most of the foreign funds would focus, were heavily bought on Sunday. Riyad Bank jumped 3.5 percent after its investment banking arm, Riyad Capital, announced a plan to boost the capital of Riyad REIT to SR1.63 billion ($435 million) from SR500 million.

National Petrochemical jumped 9.9 percent after proposing a 0.5 riyal per share annual dividend, in line with the previous year’s, and Saudi Industrial Investment Group gained by the same margin after reporting annual profit increased more than ten-fold.

The Dubai index, which had been languishing at two-year lows, climbed 1.0 percent as ENBD, which is usually very thinly traded, soared 13.6 percent to 10 dirhams in its heaviest volume ever. It broke major technical resistance around 9 dirhams, where it had peaked several times since mid-2016.

The bank, majority owned by government, said it would ask shareholders on March 27 to approve a capital increase through the issuance of up to 7.35 billion dirhams ($2.0 billion) of new shares at a discount of at least 10 percent to the prevailing market price, with preference to existing shareholders. It currently has about 5.5 billion shares.

ENBD said in January it had started strategic discussions with Russia’s Sberbank about a possible purchase of Sberbank’s stake in Turkey’s Denizbank, and analysts think the capital increase is a signal that the acquisition will go ahead.

Chiradeep Ghosh, research manager at SICO Bahrain, said ENBD shares were reacting positively to the capital increase plan because to raise so much new capital, the bank would probably have to raise its 5 percent ceiling for foreign ownership of the shares. Actual foreign ownership is currently at 5 percent.

The stock trades at a deep discount to its peers due to the low foreign ownership limit. We have a ‘Buy’ recommendation on the stock with a target price of 12 dirhams per share,” he said.

Most of the rest of Dubai’s market remained sluggish, however, partly because of signs that money is flowing out to catch the bull run in Saudi Arabia. Twenty-two Dubai stocks fell and nine rose.

In Abu Dhabi, Dana Gas climbed 2.7 percent after saying it would hold a board meeting on Wednesday. There has been speculation that it could reach an agreement with holders of its $700 million of sukuk on restructuring the instruments, although the nature of any deal remains unknown.

Qatar’s index fell 0.7 percent as Doha Bank lost 4.9 percent, dropping sharply for a second straight day after going ex-dividend.