April 3, 2017 / 6:00 AM / 4 months ago

MIDEAST STOCKS-Sideways move seen as institutional funds may keep away

2 Min Read

DUBAI, April 3 (Reuters) - Stock markets in the Gulf may move sideways in thin volume on Monday with institutional buyers expected to stay on the sidelines as small moves in global markets and crude oil offer no fresh catalyst and as they wait for first-quarter results.

International benchmark Brent futures slipped 14 cents, or 0.3 percent, to $53.39 a barrel by 0551 GMT. The March contract closed on Friday at $52.83 a barrel.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent. It gained 12.3 percent in the last quarter, its biggest quarterly gain in 6-1/2 years.

Stock markets in the Gulf, meanwhile, have been trading sideways over several days in very thin trade. Many portfolio managers and analysts said that institutional funds have remained on the sidelines, waiting for first-quarter results due in the coming weeks.

In a survey conducted by Reuters last week of 13 leading Middle Eastern fund managers' expected asset allocation over the next three months, they preferred Saudi Arabia by a considerable margin - 62 percent planned to increase their allocations towards Saudi stocks and none to cut them.

Most managers said that the possible inclusion of Saudi shares in an international emerging market index would help boost volumes and reduce the cost of equity, making them more attractive buys at current levels.

MSCI will decide in June whether to review Saudi Arabia for possible inclusion in its emerging market index, while FTSE will decide in September on an upgrade.

In Kuwait, shares of Al Mowasat Healthcare and Gulf Insurance Group go ex-dividend on Monday. (Reporting by Celine Aswad; Editing by Saeed Azhar and Biju Dwarakanath)

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