March 3, 2019 / 1:02 PM / 3 months ago

MIDEAST STOCKS-Saudi index rises as countdown begins for entry to FTSE Russell index

    * Saudi index up 9 pct in 2019, outperforming Gulf peers
    * Saudi's entry to FTSE Russell emerging index on March 18
    * Kuwait index jumps on banking rally 
    * Dubai rebounds after last week's profit taking

    By Saeed Azhar
    DUBAI, March 3 (Reuters) - Saudi stocks ended higher on
Sunday, helped by optimism over more fund inflows ahead of the
entry of Gulf's biggest market to the FTSE Russell's emerging
market index is just over two weeks.
    The Tadawul main index was up 0.5 percent, led by
financial stocks. Samba Financial Group rose 1.1
percent and Al Rajhi Bank climbed 0.4 percent.
    Al Tayyar Travel Group surged 5.7 percent as
investors went past its full-year loss in 2018 to take comfort
from its plans to raise 3 billion riyals ($800 million)in fresh
capital.
    One trader, who asked not to be named, said speculation
around a possible takeover of Dubai-based ride-hailing firm
Careem by Uber Technologies           is also fuelling gains in
Al Tayyar's stocks given the company's minority stake in
Careem.
    Saudi Arabia's stock exchange expects passive fund inflows
of $15 to $20 billion this year as it gears up for inclusion in
emerging market benchmarks, its chief executive told Reuters on
Thursday.
    "The first phase of FTSE inclusion should drive in 10
percent of the estimated total $6 billion in passive flows into
the Saudi market," said Vrajesh Bhandari, a senior portfolio
manager at Al Mal Capital.
    He said bigger moves are expected when the global index
provider MSCI adds Saudi stocks to its global benchmark in two
tranches in May and August, however he cautioned that the Saudi
market's valuation appears rich.
    The Saudi index has gained about 9 percent so far this year.
outperforming its Gulf peers, trading at nearly 17 times
price-to-earnings ratio. 
    Bhandari said Saudi market's rise may be capped by a slower
earnings growth profile compared to other emerging markets.
    Saudi stocks will be the largest Middle East market in the
FTSE Emerging Index with an overall weighting of 2.7 percent,
according to the index-compiler FTSE Russell said.
    The inclusion will happen in several tranches and will be
completed by December this year. The first 25 percent tranche
will be added starting March 18, according to the FTSE Russell
document. 
    Dubai stocks were up 0.3, rebounding from a selloff
on Friday when profit-taking set in after a sharp rally in
property stocks following strong fourth-quarter earnings of
companies linked to Emaar Properties.
    Shares of DAMAC Properties surged 5.8 percent and
Emaar Malls rose 1.7 percent.
    Although the Dubai index has rallied this year, led by
strong fourth-quarter results at real estate firms, an expected
further fall in property prices is capping gains.
    The Kuwaiti index gained 0.8 percent  fueled by gains
in banking stocks. Burgan Bank ended 1.9 percent
higher after recently posting a rise in quarterly earnings.  
Kuwait Finance House rose nearly 1 percent.
    Egyptian stocks, which have been the best perfoming
stocks in the Middle East this year with gains of 13.7 percent,
ended 0.2 percent higher on Sunday led by financials.
    Bigger gains were capped by selling in Global Telecom
Holding, which dropped 1.7 percent. 
    The stock has been volatile since Amsterdam-based VEON
Holdings, an existing shareholder, recently submitted a
mandatory takeover offer for the firm.     
 SAUDI       The index         rose 0.5 pct to 8,534 points
 ARABIA      
 DUBAI       The index          rose 0.3 pct to 2,642 points
 QATAR       The market was closed for a holiday
 ABU DHABI   The index        fell 0.3 pct to 5120 points
 EGYPT       The index          rose 0.xx pct to points
 KUWAIT      The index        rose 0.8 pct to 5,525 points
 OMAN        The index        fell 0.2 pct to 4,138 points
 BAHRAIN     The index        rose 0.3 pct to 1,417 points
 
($1 = 3.6728 UAE dirham)

($1 = 3.7502 riyals)

 (Additional reporting by Marwa Rashad
Editing by Raissa Kasolowsky)
  
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