September 16, 2019 / 1:52 PM / a month ago

MIDEAST STOCKS-Saudi funds, oil assurance steady stocks after Aramco attack

    * Most Banks rise in Saudi     * Lender FAB boosts Abu Dhabi     * Financials, property aid Dubai     * Industries Qatar, QNB lift Qatar      By Shakeel Ahmad     Sept 16 (Reuters) - Saudi Arabian stocks were supported by domestic funds on Monday after top oil producer Saudi Aramco (IPO-ARMO.SE) assured some clients that there will be no supply shortage as a result of Saturday’s attack on its facilities.     The attack shut about 5% of global supply, sending oil prices as much as 19.5% higher, their biggest intra-day percentage gain since 1991’s Gulf War.     Despite Aramco’s assurance, concerns remain over oil supply which could be disrupted if the outage continued for long, while a full return to normal oil production volumes “may take months”, sources told Reuters.     It could also have a wider impact on Saudi Aramco’s planned initial public offering (IPO) on its home market.     “The attacks could complicate Aramco’s IPO plans given rising security risks and potential impact on its valuation,” Eurasia wrote in a note to clients.     After losing 1.1% on Sunday, the country’s stock market index closed 1% higher with its biggest lender National Commercial Bank surging 4.2% and Al Rajhi Bank  rising 1.4%.     Traders cited buying by local and regional investors, as most foreign active investors have already exited the index, which is trading roughly flat year-to-date after it rose as much as 20% at its peak in May.      “Our channel checks suggest most of the ‘active’ foreign money in KSA has already exited the market and what is left is passive funds, who have to stay invested,” said Vrajesh Bhandari, senior portfolio manager at Al Mal Capital.     It means local and regional institutions and retail investors are calling the shots and that supply can be relatively better controlled with some support from domestic funds, Bhandari added.      Other major Gulf markets also rose as cheaper valuations attracted the investors.      The Abu Dhabi index rose 1.7% boosted by a 2% jump in the United Arab Emirates’ biggest lender First Abu Dhabi Bank  and a 2.6% Emirates Telecommunications Group     “In terms of fundamentals, certain high quality companies across MENA are currently being undervalued and investors are gradually adding to their exposure,” Bhandari said.      Qatar’s index gained 1.1% with petrochemical maker Industries Qatar up 2.3% and Qatar National Bank  1.3% higher.     In Dubai, the index was down 0.3% with the market heavyweight lender Emirates NBD gaining 0.8%.     The emirate’s largest lender has risen 17.5% this month after it raised its foreign ownership limit to 20% from 5% and announced its intention to lift the limit to 40%.      Outside the Gulf, Egypt’s blue-chip index was down 0.4% with real estate investment firm Talaat Mostafa Group Holding dropping 2.1%.       SAUDI ARABIA  The index         rose 1% to 7,827 points  ABU DHABI     The index        rose 1.7% to 5,161 points  DUBAI         The index          was up 0.3% to 2,878 points  QATAR         The index        gained 1.1% to 10,512 points  EGYPT         The index          lost 0.4% to 14,970 points  BAHRAIN       The index        fell 0.7% at 1,524 points  OMAN          The index        slipped 0.3% to 4,009 points  KUWAIT        The index        declined 2.2% to 6,101 points     (Reporting by Shakeel Ahmad in Bengaluru; Editing by Alexander Smith)   

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