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Reuters
Saudi Arabia’s stock index fell on Monday on rumours that index compiler FTSE might not upgrade Riyadh to emerging-market status as quickly as hoped, while Qatar notched up its fifth straight session of gains.
At the end of the business day on September 29, FTSE will announce its decision on whether to include Saudi Arabia in its secondary emerging market index.
For several weeks the market had been pricing in a strong chance of an upgrade.
Analysts have predicted Saudi Arabia could see around $3.2 billion to $3.7 billion of passive fund inflows as a result, although that would not occur until the decision actually took effect, probably in late 2018.
Two fund managers told Reuters that the Saudi stock index fell 1.4 percent on Monday because investors were worried that FTSE might delay the upgrade on the grounds that foreign investors lacked enough access.
Shares in major companies that would probably be included in FTSE’s emerging market index were some of the worst performers on Monday. Dairy maker Almarai lost 3.0 percent.
In Abu Dhabi, Dana Gas sank 4.1 percent, taking its losses since Wednesday to a little more than 10 percent, as investors awaited the outcome of a London High Court trial on the validity of its $700 million of outstanding Islamic bonds .
The trial focusses on Dana’s June announcement that it would not redeem its sukuk on the grounds that changes in Islamic financial practice had made them unlawful in the United Arab Emirates.
Most other Abu Dhabi shares were weak, dragging the index 0.7 percent lower. In Dubai, the index fell 0.9 percent as 20 shares declined and only nine rose.
Qatar’s index rose 0.6 percent, however, as regional investors stepped up their purchases of Qatari shares. They accounted for roughly 10 percent of total market turnover, bourse data showed.