September 7, 2017 / 1:45 PM / 10 months ago

MIDEAST STOCKS-Saudi up amid royal succession talk, UAE's Dana resumes surge

* Rumours, analysts say crown prince may soon take throne

* Market rose after Mohammed bin Salman’s last promotion

* Policy impact not clear, but might speed some policies

* Dana Gas hits three-year high

* Egypt’s rise is broad-based

By Andrew Torchia

DUBAI, Sept 7 (Reuters) - Saudi Arabia’s stock market rose on Thursday amid rumours that Crown Prince Mohammed bin Salman might soon take the throne, while Abu Dhabi-listed Dana Gas resumed rising sharply in the wake of its deal to obtain payments from Iraqi Kurdistan.

“The royal palace is finalising plans to transfer power from King Salman to his son, Crown Prince Mohammed bin Salman,” geopolitical consultancy Eurasia Group said in a report, predicting the plans would be implemented “soon”.

Saudis have been exchanging similar predictions on Twitter for days. Another prevalent rumour is that King Salman, 81, may transfer the post of prime minister to his son.

The effect on policymaking of any such change is not clear, partly because the crown prince already has so much authority. But some analysts think it could speed economic reforms such as privatisations and spending to develop non-oil industries.

“A new governance model will undermine ruling family unity but produce a more effective system of decision-making that is conducive to reforms,” Eurasia said in a report.

Also, a new king might mark his accession with financial payouts such as a bonus for public sector workers, as Saudi kings have done in the past. That could give a brief but significant boost to the flagging economy.

In June, when Mohammed bin Salman was promoted to crown prince from deputy crown prince, the Saudi stock index shot up 7 percent in two days.

It gave up much of those gains in subsequent weeks, but on Thursday investors took the rumours about a royal accession positively and boosted the index by 0.8 percent, making Saudi Arabia by far the best-performing Gulf Arab bourse.

As in June, shares in companies that are central to Mohammed bin Salman’s economic diversification plans surged. Miner Ma’aden added 3.3 percent and Emaar the Economic City , developer of a big business zone, rose 3.6 percent.

National Commercial Bank, the biggest listed lender, added 2.5 percent.

Most other Gulf markets were almost flat. In Dubai, the index edged up 0.1 percent although the most heavily traded stock, GFH Financial, climbed 4.9 percent. It has been trading near its lows for the year.

Abu Dhabi’s index edged down 0.1 percent but Dana surged 6.5 percent to a three-year closing high of 0.82 dirham. It was again Abu Dhabi’s most heavily traded stock and accounted for two-thirds of trading volume.

It had risen 20 percent on Monday and Tuesday in response to the company’s deal to receive hundreds of millions of dollars in payments from the government of Iraqi Kurdistan, but then stalled on Wednesday. The deal clears the way for Dana to resume expanding gas production in the area over the long term.

Egypt’s index added 0.9 percent in a broad-based rise, with nine out of the 10 most heavily traded stocks gaining in the heaviest trading volume for almost a month.


* The index climbed 0.8 percent to 7,361 points.


* The index edged up 0.1 percent to 3,644 points.


* The index edged down 0.1 percent to 4,454 points.


* The index edged down 0.1 percent to 8,675 points.


* The index added 0.9 percent to 13,433 points.


* The index fell 0.3 percent to 6,897 points.


* The index rose 0.3 percent to 1,316 points.


* The index dropped 0.4 percent to 5,047 points. (Editing by Dale Hudson)

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