* Qatar climbs on passive fund inflow after FTSE index
* Saudi dips to test technical support; bank shares main
* STC gains on report of possible international divestment
* Abu Dhabi drops to 11-week low
* Egypt climbs as investors welcome government's proactive
By Celine Aswad
DUBAI, Sept 20 Qatar's equity index climbed on
Tuesday as passive funds flowed into shares now included in
FTSE's secondary emerging market index while other Gulf markets
Doha's index rose 1.0 percent, recouping some of the
percent losses from the previous session. Passive funds will
flow into 22 shares from Tuesday, and the stocks will continue
to be bid up for several days to come as managers meet their
Islamic lender Masraf Al Rayan, which slumped 5.1
percent on Monday, added 1.9 percent and telecommunication
provider Ooredoo, which also dropped 5.1 percent the
previous session, climbed 0.4 percent.
Elsewhere, Saudi Arabia's index slipped 0.2 percent
to 5,925 points but closed 56 points above its intra-day low.
The index remains close to technical support established by the
August low of 5,911 points.
Banking shares were hit hardest, with Samba Financial Group
dropping 2.8 percent. Some petrochemical shares
underperformed as Brent futures fell below $46 a barrel;
large-cap producer Saudi Kayan Petrochemical slipped
But Saudi Telecom Co (STC) rose 1.8 percent to
56.00 riyals ($14.93) after Bloomberg reported on Monday that
the company was exploring options for its $1.8 billion indirect
stake in Maxis, the second-largest Malaysian wireless
carrier. A Malaysian pension fund or large investors are among
the potential buyers, the report said.
Riyadh-based NCB Capital said in a note that STC's losses
from international operations stood at 250 million riyals
($66.65 million) in first half of 2016 which reflects the
company's long-term issue with its international investments.
"On a positive note, Maxis is currently trading at a forward
price to earnings higher than the global median. Therefore, we
believe the current valuation is attractive for STC."
Analysts at NCB rate the stock a "buy" with a price target
of 68.9 riyals.
Almarai rose 1.8 percent after the largest dairy
producer in the Gulf said the partial commercial operations of
its new bakery facility in the the northern city Hail has
started. The facility has four production lines with a total
investment of 856 million riyals.
Dubai's index pulled back 0.9 percent, hit by
profit taking in line with subdued global markets.
GFH Financial Group lost 2.0 percent and Dubai
Investments dropped 1.4 perent.
In Abu Dhabi, the share index dropped 0.4 percent to
an 11-week low closing level, with a little under half of the
traded shares declining.
Abu Dhabi National Energy retreated 3.9 percent
and the largest listed real estate developer Aldar Properties
lost 1.5 percent.
Investors turned slightly more positive towards Egyptian
shares, with Cairo's main index adding 0.9 percent.
The government will start talks with China over a $2 billion
loan next week and plans to issue international bonds in October
or November, the Deputy Finance Minister for Treasury said on
This comes after an IMF official said last week that the
Fund had held "very productive discussions" with authorities in
China and Saudi Arabia about their contributing to that
Some of the shares favoured by foreign funds outperformed
with Global Telecom Holding adding 2.4 percent and
Commercial International Bank rising 1.2 percent.
Over the last several months the government has been
proactive about jolting the economy back to stronger growth and
replenishing the dried up hard currency stock. Case in point,
the Trade and Industry Minister Tarek Kabil said on Tuesday that
exports would rise by 10 percent if and when authorities devalue
In March the central bank devalued the currency, but its
positive effects were short lived as capital inflow remained
* The index lost 0.2 percent to 5,925 points.
* The index rose 1.0 percent to 10,257 points.
* The index fell 0.9 percent to 3,455 points.
* The index lost 0.4 percent to 4,464 points.
* The index added 0.9 percent to 8,049 points.
* The index erased 0.3 percent to 1,132 points.
* The index declined 0.2 percent to 5,752 points.
($1 = 3.7508 riyals)
(Editing by Louise Heavens)