Wednesday, Jun 12, 2013


 
Saudi SE              7583.28               -0.69% 
Dubai FM              2358.28               +0.58% 
Abu Dhabi SM          3565.89               +0.27% 
Kuwait SE             8029.31               +1.28% 
Doha SM               9354.50               -0.20% 
Muscat SM             6657.22               +0.36% 
Bahrain SE            1199.63               +0.30% 
Cairo SE              4848.60               +1.52% 
Amman                 2017.95               -0.18% 
 
ICE Brent $/bbl        102.62               -0.34% 
Gold $/troy oz        1377.10               +0.01% 
Euro-USD                 1.33               -0.01% 
DJIA                 15122.02               -0.76%

By Nikhil Lohade

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--The U.A.E. and Qatar are likely to be in the spotlight on Wednesday after index compiler MSCI Inc. reclassified both as emerging markets, from frontier status, an elevation that will provide more cheer to investors in the Persian Gulf region.

Investors were mostly hopeful that the two countries would secure a promotion this time around, after being under the MSCI scanner for the past several years. The move will likely trigger hundreds of millions of dollars in fresh foreign inflows.

"The MSCI decision to upgrade Qatar and United Arab Emirates from Frontier Markets to Emerging Markets, with effect May 2014, reflects a growing realisation of how far these economies and their financial markets have developed in recent years," said Sam Vecht, a director and portfolio manager at BlackRock.

The two markets have rallied this year, part boosted by hopes of an MSCI upgrade, and while the index provider's announcement will likely provide a near-term boost, some analysts say that the expectations were mostly priced in. Moreover, foreign funds tracking the MSCI benchmarks will likely start to invest only after the reclassification takes effect in May next year, they added.

Dubai's benchmark stocks gauge is among the top performers in the world this year, rising 45% to date, while neighbor Abu Dhabi's gauge has added 36% and Qatar is up some 12%.

Morocco and Egypt, the only two emerging markets in the wider Middle East & North Africa region before the reclassification of U.A.E. and Qatar, will also attract attention after MSCI cut Morocco to frontier status and put Egypt on watch for a possible downgrade.

In the broader Persian Gulf region, markets are seen mixed amid mostly light local news flow.

Asian stocks were mostly down with Japan's Nikkei Stock Average extending its declines on Wednesday as investors continued to digest Tuesday's underwhelming outcome to the Bank of Japan's policy meeting. They also took a cue from Wall Street declines overnight as concerns about the U.S. Federal Reserve slowing its asset purchase program in the near term continued to play on sentiment.

U.A.E.: Dubai shares finished +0.6% at 2358.28 on Tuesday and Abu Dhabi's market was up 0.3% at 3565.89.

SAUDI ARABIA: The Tadawul market ended 0.7% lower at 7583.28 Tuesday, weighed by bank and petchem stocks.

Weak leads from the international markets and investors continue shift from sectors such as petchem and commodities to consumer names, said one local trader, noting he remains optimistic about the market's performance during the summer months.

In terms of stocks, Abdullah A. M. Al Khodari Sons Co. rose 0.9% to SAR33 after the company said it has won three deals worth a combined value of SAR862.9 million for local construction and cleaning projects.

KUWAIT: The benchmark index rose 1.3% to 8029.31 on Tuesday; the market is up some 35% this year.

Mushrif Trading and Contracting Co. said it has signed a KWD84.88 million deal to implement a local infrastructure project for the country's Public Authority for Industry.

QATAR: Doha's market ended down 0.2% at 9354.50 Tuesday; it's still up some 12% for the year.

BAHRAIN: The main gauge of stocks closed up 0.3% at 1199.63 Tuesday.

OMAN: Muscat's market finished +0.4% at 6657.22 Tuesday, propped up by bank stocks.

EGYPT: The benchmark EGX 30 Index rose 1.5% to 4848.60; the market is still down some 11% for the year amid political and economic uncertainty in the country.

MSCI noted it's closely monitoring the situation in Egypt, especially the negative developments in the foreign exchange market. The index provider said it may launch a public consultation on a potential exclusion of Egypt from the emerging markets index were the situation to worsen in the coming months.

NEWS FROM AROUND THE GULF: Cash-rich United Arab Shipping Co. is set to order 15 to 17 container ships from Hyundai Heavy Industries Co. in a $2 billion deal that will include five Triple-Es, the world's largest container ships, two people familiar with the matter said Tuesday.

Iraq has resumed normal crude oil exports from the southern Basra terminals after a suspension of one day due to high winds in the Gulf, a shipping agent in Basra said.

Write to Nikhil Lohade at nikhil.lohade@dowjones.com

Copyright (c) 2013 Dow Jones & Co.

(END) Dow Jones Newswires

12-06-13 0428GMT