March 17, 2019 / 1:36 PM / 3 months ago

MIDEAST STOCKS-Saudi dips ahead of FTSE Russell index inclusion, other markets mixed

 (Adds more details, background)
    By Hadeel Al Sayegh and Saeed Azhar
    DUBAI, March 17 (Reuters) - Saudi stocks dipped slightly on
Sunday, a day ahead of the market's inclusion in the FTSE
Russell's emerging market index, while other Gulf markets were
mixed with Qatar down 1.1 percent on weakness in banks and real
estate firms.        
    Investors booked profits in recent gainers on the Tadawul,
weakening the benchmark, which was down 0.2 percent. The Saudi
index has gained 9.5 percent so far this year, outperforming
major Gulf markets.
    Foreign investors have been net buyers of Saudi stocks every
week this year, positioning for passive fund inflows after its
inclusion in the FTSE Russell index on March 18 and in MSCI from
late May.
    "There is some profit-taking on select leading stocks but
the overall trend is still upward," said a Saudi trader, asking
not to be named.
    Foreign net buying has hit $2.1 billion year-to-date. 
   "We can reasonably expect between 90 billion to 100 billion
riyals ($24-$27 billion) inflows," said Muhammad Faisal Potrik,
head of research at Riyad Capital.
    He said traded value is also expected to rise 14 percent to
$100 million a day in the wake of Saudi's inclusion in key
benchmark indices.
    
    NON-FINANCIALS DIP
    On Sunday, the Saudi market was steady, with weakness among
some non-financial stocks, notably Saudi Basic Industries
, which fell 0.3 percent, and Saudi Telecom,
which dropped 0.8 percent.
    However, Al Rajhi Bank was up 0.1 percent, while
Saudi British Bank gained 0.9 percent. 
    Potrik said the Saudi market had risen only by a modest 14
percent in the last 12 months, as opposed to more significant
rallies in Dubai and Qatar before index inclusion.
    Foreign funds had sold Saudi assets in late 2018 following
the murder of Saudi journalist Jamal Khashoggi in early October
in the Saudi consulate in Istanbul.
    Among other Gulf markets, the Abu Dhabi index fell
0.4 percent, hit by weakness in market heavyweights, First Abu
Dhabi, which was down one percent.
    News that Qatar will no longer permit First Abu Dhabi Bank
to provide services for new customers in Doha, its regulator
said, amid a probe over alleged currency manipulation after the
Gulf rift did not have much impact on the stock.
    An FAB spokeswoman said the bank had no immediate comment on
the matter. 
    Abu Dhabi-listed Dana Gas, however, gained 2.7
percent after the company approved plans for a sukuk buyback and
also said it plans to seek shareholder approval to buy back 690
million of the company's shares. The company said share buyback
is aimed at enhancing shareholder value.
    Dubai stocks were up 0.1 percent, buoyed by Emaar
Properties which was up 0.4 percent, however Aramex
 was down 2.1 percent after Australia Post sold its 10
percent stake in the company.
    The United Arab Emirates "markets continue to trade on
weakness in traded values and index movement within a tight
horizontal range due to general assembly meetings season, where
dividends are being approved, and shares prices correcting
downwards because of that as they trade ex-dividend," said
Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital.
    "We are also in a company vaccuum currently and until the
first quarter results for this year become available, incentives
to invest are not strong," Yasin said.
    Qatar index dropped 1.1 percent, hurt by selling in
insurance and real estate stocks. Qatar Insurance was
down 4.1 percent, while Barwa Real Estate dropped 1.9
percent.
    "We have been bearish on Qatar since the beginning of the
year and expect the market to continue to underperform," said
Vrajesh Bhandari, senior portfolio manager at Al Mal Capital. 
    "We see limited growth opportunities for companies &
therefore find valuation levels stretched," Bhandari said.
    Elsewhere in the region, Egypt's main benchmark rose 0.3
percent, led by banks, investment firms and real estate
companies. 
    Commercial International Bank rose 0.7 percent.
Egypt Kuwait Holding rose 3.4 percent, while
Heliopolis Co for Housing and Development rose 2.7
percent.    
      
 SAUDI ARABIA  The index         fell 0.2 pct to 8,563 points
 ABU DHABI     The index        fell 0.4 pct to 4,977 points
 DUBAI         The index          was up 0.1 pct at 2,578
               points
 QATAR         The index        fell 1.1 pct to 9,863 points
 EGYPT         The index          rose 0.3 pct to 15,033 points
 KUWAIT        The index        rose 0.1 pct to 5,674 points
 OMAN          The index        rose 0.3 pct to 4,086 points
 BAHRAIN       The index        was flat at 1,410 points
 ($1 = 3.7502 riyals)

 (Additional reporting by Marwa Rashad
Editing by Gareth Jones)
  
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