Qatar gains after FTSE inclusion, Saudi near technical support level

Reuters

Qatar’s equity index climbed on Tuesday as passive funds flowed into shares now included in FTSE’s secondary emerging market index while other Gulf markets sagged.
Doha’s index rose 1.0 percent, recouping some of the percent losses from the previous session. Passive funds will flow into 22 shares from Tuesday, and the stocks will continue to be bid up for several days to come as managers meet their fund mandates.
Islamic lender Masraf Al Rayan, which slumped 5.1 percent on Monday, added 1.9 percent and telecommunication provider Ooredoo, which also dropped 5.1 percent the previous session, climbed 0.4 percent.
Elsewhere, Saudi Arabia’s index slipped 0.2 percent to 5,925 points but closed 56 points above its intra-day low. The index remains close to technical support established by the August low of 5,911 points. Banking shares were hit hardest, with Samba Financial Group dropping 2.8 percent. Some petrochemical shares underperformed as Brent futures fell below $46 a barrel; large-cap producer Saudi Kayan Petrochemical slipped 1.6 percent.
But Saudi Telecom Co (STC) rose 1.8 percent to 56.00 riyals ($14.93) after Bloomberg reported on Monday that the company was exploring options for its $1.8 billion indirect stake in Maxis, the second-largest Malaysian wireless carrier. A Malaysian pension fund or large investors are among the potential buyers, the report said.
Riyadh-based NCB Capital said in a note that STC’s losses from international operations stood at 250 million riyals ($66.65 million) in first half of 2016 which reflects the company’s long-term issue with its international investments.
“On a positive note, Maxis is currently trading at a forward price to earnings higher than the global median. Therefore, we believe the current valuation is attractive for STC.”
Analysts at NCB rate the stock a “buy” with a price target of 68.9 riyals. Almarai rose 1.8 percent after the largest dairy producer in the Gulf said the partial commercial operations of its new bakery facility in the the northern city Hail has started. The facility has four production lines with a total investment of 856 million riyals.
Dubai’s index pulled back 0.9 percent, hit by profit taking in line with subdued global markets. GFH Financial Group lost 2.0 percent and Dubai Investments dropped 1.4 perent. In Abu Dhabi, the share index dropped 0.4 percent to an 11-week low closing level, with a little under half of the traded shares declining. Abu Dhabi National Energy retreated 3.9 percent and the largest listed real estate developer Aldar Properties lost 1.5 percent.
Investors turned slightly more positive towards Egyptian shares, with Cairo’s main index adding 0.9 percent. The government will start talks with China over a $2 billion loan next week and plans to issue international bonds in October or November, the Deputy Finance Minister for Treasury said on Monday.