World Markets

MIDEAST STOCKS-Saudi index hits 8-month low; Qatar outweighs regional markets

Credit: REUTERS/FAISAL AL NASSER

Saudi Arabian stocks closed at an eight-month low on Thursday as banking shares continued to weigh on the market, while Qatar outperformed other major Gulf markets mainly boosted by financial shares.

By Ateeq Shariff

Aug 29 (Reuters) - Saudi Arabian stocks closed at an eight-month low on Thursday as banking shares continued to weigh on the market, while Qatar outperformed other major Gulf markets mainly boosted by financial shares.

On Wednesday, a second batch of Saudi shares was added to the MSCI emerging markets index after the country's stocks were first included in the index in May.

The inclusion brought Saudi's share to 2.8% of the index's total market capitalization.

However, the event failed to provide upward momentum for the Saudi stocks as receding fund inflows rattled investor confidence.

The Saudi Arabia index .TASI fell 1.9%, touching its lowest level since January, with all of its banks dropping. Al Rajhi Bank 1120.SE shed 3.4% and Samba Financial Group 1090.SE plunged 4.2%.

A Reuters poll found 60% of fund mangers said they would decrease their investments in Saudi Arabia, displaying bearishness that has carried over from last month.

Investment bank EFG Hermes said in a note on Wednesday that the investment case for Saudi banks is no longer "compelling" in their view on the backdrop of receding passive flows, rates becoming a headwind, and the emergence of credit quality concerns.

Qatar's index .QSI closed 2.1% higher with most of its blue-chip stocks gaining. Qatar National Bank QNBK.QA, the Middle East and Africa's largest lender, rose 3.4% and Industries Qatar IQCD.QA was up 2.7%.

Egypt's blue-chip index .EGX30 closed 1.6% higher, reaching its highest level since May, with country's largest lender Commercial International Bank COMI.CA rising 2.9% and Egypt Kuwait Holding EKHO.CA closing 3.1% higher.

Middle Eastern funds plan to increase their investments in Egypt, according to the Reuters poll.

Earlier this month, Egypt reported its lowest headline inflation rate in nearly four years, and its central bank cut interest rates by 150 basis points.

Egypt's index is up 13.8% so far this year, beating most regional markets.

Back in the Gulf, the Abu Dhabi index .ADI gained 0.7% with Emirates Telecommunications ETISALAT.AD adding 1.6% and Abu Dhabi Commercial Bank ADCB.AD advanced 3.5%.

Some 50% of fund managers polled said they would increase their investments in the United Arab Emirates, a trend that has continued through most of the year.

However, economists polled by Reuters revised their growth expectations down by 0.8 percentage points to 2.2% for the UAE through to 2021.

In Dubai, the index .DFMGI traded flat as Dubai Islamic Bank DISB.DU increased 0.8%.

SAUDI ARABIA

The index .TASI dropped 1.9% to 8,020 points

ABU DHABI

The index .ADI gained 0.7% to 5,166 points

DUBAI

The index .DFMGI was flat at 2,759 points

QATAR

The index .QSI increased 2.1% to 10,233 points

EGYPT

The index .EGX30 up 1.6% to 14,835 points

BAHRAIN

The index .BAX lost 0.1% to 1,533 points

OMAN

The index .MSI gained 0.8% to 4,005 points

KUWAIT

The index .BKP was down 0.2% at 6,528 points

(Reporting by Ateeq Shariff in Bengaluru Editing by Frances Kerry)

((AteeqUr.Shariff@thomsonreuters.com; +918067497129;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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