July 7, 2019 / 1:16 PM / 2 months ago

MIDEAST STOCKS-Saudi stocks fall as Almarai disappoints, Kuwait extends gains

    * Saudi falls 0.4%, Almarai drops 2.5% after Q2 result
    * Kuwait rises for a seventh day
    * Banks weigh on Qatar index 
    * Real estate, banks weigh on Dubai
    * Ahli United Bank's surge lifts Bahrain 

    By Saeed Azhar
    DUBAI, July 7 (Reuters) - Saudi stocks fell on Sunday in
response to a fall in profits at food company Almarai and
weakness in blue-chip stocks, while the Kuwait index rose for
the seventh straight session buoyed by the recent MSCI move to
upgrade Kuwaiti stocks to emerging market.
    The Saudi market had opened slightly higher on selective
buying in financials, but quickly lost momentum after Almarai's
shares plunged.
    Almarai Co fell 2.5% after it reported a nearly
12% drop in second-quarter profit and also announced the
resignation of its Chief Executive Alois Hofbauer..
    Saudi Basic Industries, the index's biggest stock
by market capitalisation, also slipped 0.2% and lender Banque
Saudi Fransi dropped almost 1%.
    Kuwait's index gained 1.2% with the index hitting a  
new high for the year, extending gains after MSCI's decision
last month to move Kuwaiti equities to its main emerging markets
index in 2020, a move that could trigger billions of dollars of
inflows.
    Kuwait has outperformed its Gulf peers in anticipation of
the MSCI move, gaining nearly 26% year-to-date.
    Middle Eastern funds plan to continue increasing investments
in Kuwait over the next three months, a Reuters poll found
earlier this week.
    "Generally the summer period sees lower liquidity, so there
is a seasonality factor. Having said that Kuwait turnover and
performance remains very solid," said Mohamad Al Hajj, head of
MENA Equity Strategy for EFG Hermes.
    There could be increased activity in the Gulf markets in
August when MSCI is set to kick in the second phase of including
Saudi stocks in its emerging market index, which could add
another $6.3-$8.2 in foreign fund flows.
    "This should also generate higher trading activity across
the region," Al Hajj said.
    Total ownership of Saudi stocks by foreign investors has
increased to 7.47% as of June 30, up from 4.67% at the end of
December, stock exchange data shows, reflecting increased active
and passive fund flows this year.
    Property stocks weighed on Dubai index, which
dropped 0.5%. Emaar Properties fell 0.5% and DAMAC
Properties dropped 2.4%. Emirates NBD was
down 1.8%.
    Qatar shares were also hit by selling in key
blue-chip shares, as investors took profit from recent gains.
    Qatar shares gained ground in recent sessions as a 10-to-one
stock split for companies on the exchange is being phased in
from June 9 and will be completed by Sunday. 
    The move is designed to boost liquidity by encouraging
smaller investors to buy shares.
    Bahrain's index gained 1.7% on the back of strong
gains in Ahli United Bank which surged 4.9% amid
expectations of completion of its merger with Kuwait Finance
House.
    
 SAUDI ARABIA  The index         fell 0.4% to 8,811 points
 ABU DHABI     The index        ended flat to 5003 points
 DUBAI         The index          fell 0.5% to 2,649 points
 QATAR         The index        dropped 0.5% to 10,518 
 EGYPT         The index          up 0.1% to 14,013 points
 BAHRAIN       The index        up 1.7% to 1,537 points
 OMAN          The index        down 0.2% to 3,817 points
 KUWAIT        The index        up 1.2% to 6,623 points
 

($1 = 3.7502 riyals)

 (Reporting by Saeed Azhar. Editing by Jane Merriman)
  
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