Saudi hits 8-month low

Qatar outpaces regional peers

DUBAI, Aug 29, (RTRS): Saudi Arabian stocks closed at an eightmonth 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 fell 1.9%, touching its lowest level since January, with all of its banks dropping. Al Rajhi Bank shed 3.4% and Samba Financial Group 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 closed 2.1% higher with most of its blue-chip stocks gaining. Qatar National Bank, the Middle East and Africa’s largest lender, rose 3.4% and Industries Qatar was up 2.7%. Egypt’s blue-chip index closed 1.6% higher, reaching its highest level since May, with country’s largest lender Commercial International Bank rising 2.9% and Egypt Kuwait Holding 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 gained 0.7% with Emirates Telecommunications adding 1.6% and Abu Dhabi Commercial Bank 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 traded flat as Dubai Islamic Bank increased 0.8%.

Saudi Arabia

The index 8,020 points

The index 6,528 points

dropped 1.9% to

Abu Dhabi

The index gained 0.7% to 5,166 points

Dubai

The index was flat at 2,759 points

Qatar

The index increased 2.1% to 10,233 points

Egypt

The index up 1.6% to 14,835 points

Bahrain

The index lost 0.1% to 1,533 points

Oman

The index gained 0.8% to 4,005 points

Kuwait

was down 0.2% at