May 14, 2019 / 1:30 PM / a month ago

MIDEAST STOCKS-Saudi market edges higher in choppy trade after drone attacks

    * Saudi Arabia "can be tipped by smallest signs of a conflict" -analyst
    * Dubai snaps 7-day losing streak
    * Abu Dhabi sinks to worst day in more than 3 years
    * Aldar Properties posts higher Q1 development sales

    By Karina Dsouza and Davide Barbuscia
    May 14 (Reuters) - Saudi Arabia's stock market was choppy on Tuesday after
an announcement by the government on armed drones attacking oil pumping stations
in Riyadh wiped out early gains. 
    Saudi stocks nudged higher, then went into reverse and closed up
just 0.1 percent. The index fell as much as 2.1% after Saudi Arabia said drones
had struck oil pumping stations two days after Saudi oil tankers were sabotaged
off the coast of the United Arab Emirates.
    Shares rose 2% in early deals after falling nearly 3.6% on Monday.
    "With rising tensions between Iran and the U.S., and with significant naval
build-up in the region, markets are sensitive to news and can be tipped by the
smallest signs of a conflict," said Mihir Kapadia, chief executive officer of
Sun Global Investments. 
    A Saudi-based banker said government funds were supporting local stocks to
limit the downside. 
    Last year sources told Reuters that when the market was hit in the aftermath
of the killing of Saudi journalist Jamal Khashoggi, Saudi Arabia's Public
Investment Fund had indirectly supported the market using local institutions. 
    Al Alamiya and Al Baha Investment and Development
tumbled 9.8% and 8.8%, respectively, while heavyweights Riyad Bank
slipped 2% and Saudi Telecom fell 2.2%.
    In Dubai, the index climbed 3.5% percent, breaking a seven-day
losing streak thanks partly to a 5% gain in real estate firm Emaar Properties
 and its units Emaar Malls and Emaar Development
.
    Emaar Malls was up 13.8%, while Emaar Development gained 8%. MSCI maintained
its decision to keep the two real estate firms in the standard index.
    Aldar Properties, the largest property developer in Abu Dhabi,
added 2.4% after it reported a rise in its first-quarter development sales.
    Abu Dhabi's index fell 2.6%, in its worst day in more than three
years. First Abu Dhabi Bank, the largest bank in the United Arab
Emirates, dropped 8.6% after index provider MSCI decided against increasing
FAB's foreign inclusion factor.
    "MSCI has surprisingly decided to maintain FAB's weight in the index,
despite the recent foreign ownership limit increase," said Jaap Meijer, head of
equity research, at Arqaam Capital.
    Despite FAB's increase to its foreign ownership limit to 40% from 25%, MSCI
has chosen to remain conservative as there has been no information on the sale
of stakes held by the ruling family, Meijer added.
    Egypt's blue-chip index, was up 0.9% with Cairo For Investment and
Real Estate Development added 3.6% after CI Capital started coverage
on the stock with an 'overweight' rating, citing favorable industry dynamics.
    Kuwait's index dropped 1.3%, with 17 of 19 stocks in the index
trading in negative territory. Integrated Holding slipped 5.5% after
posting a fall in net profit for its first-quarter.

 SAUDI ARABIA  The index         was up 0.1% at 8,374 points
 ABU DHABI     The index        dropped 2.6% at 4,803 points
 DUBAI         The index          rose 3.5% at 2,613 points
 QATAR         The index        added 0.6% to 9,799 points
 EGYPT         The index          rose 0.8% to 14,024 points
 BAHRAIN       The index        was down 0.5 pct at 1,408 points
 OMAN          The index        dipped 0.3% at 3,828 points
 KUWAIT        The index        lost 1.3% at 5,999 points
 
 (Reporting by Karina Dsouza in Bengaluru
Editing by Gareth Jones)
  
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