Regional stocks tread modestly

Most Middle Eastern stock markets were soft yesterday with Qatar pulling back after two days of strong gains, but a few individual stocks in Saudi Arabia rose sharply in response to positive news.

The Qatari index, which had surged 6.7 per cent in the previous two days as heavyweights Qatar National Bank and Industries Qatar soared after announcing plans to raise their foreign ownership ceilings, fell back 0.6 per cent.

QNB slipped 2 per cent and Industries Qatar retreated 0.9 per cent. Qatar Insurance sank 8.4 per cent in its heaviest trade since May 2015; at the end of this week, it will be removed from several FTSE global indexes.

Islamic insurer Al Khaleej Takaful tumbled 9.1 per cent after saying on Tuesday that it would distribute no dividend for 2017, after the central bank asked it to recognise an impairment provision.

In Saudi Arabia, the index was almost flat amid profit-taking in banks and petrochemicals. Al Rajhi Bank, into which foreign money has been pouring in anticipation of Saudi Arabia being upgraded to emerging market status later this year.

But stocks with positive news were heavily traded, showing underlying market sentiment remained strong. Saudi Automotive Services jumped 3.7 per cent after its board proposed a capital increase to 600 million Saudi riyals from 540m riyals, using retained earnings, to fund expansion.

Retailer United Electronics climbed 6.9 per cent to 67.30 riyals. EFG Hermes raised its target price for the stock to 90 riyals from 50 riyals and, earlier this month, CI Capital raised its target by 38 per cent to 80 riyals.

National Petrochemical continued to rocket after announcing very strong annual earnings at the end of last week.

Dubai’s index was also almost flat as builder Drake & Scull surged 2.8 per cent.

Meanwhile, emerging market stocks fell for the first time in five days yesterday, as the threat of a fresh round of US tariffs targeted at China offset a solid start to the year.

MSCI’s emerging market index, which covers 24 countries, was down 0.4 per cent as the wave of trade uncertainty also pushed dollar-denominated EM government bonds towards their weakest point since November.