Mideast Stocks: Saudi Arabia rebounds following deep sell-off, FAB weighs on Abu Dhabi

Saudi Arabia's stock market edged 1.5% higher a day after its shares fell nearly 3.6%


DUBAI - Saudi Arabia's stock index rose on Tuesday, rebounding after a sell-off triggered by news of oil tankers being attacked off the coast of the United Arab Emirates, while Abu Dhabi dropped to its worst day in more than three years, pressured by First Abu Dhabi Bank.

Saudi Arabia's stock market edged 1.5% higher a day after its shares fell nearly 3.6% after Riyadh said two of its oil tankers were among the vessels hit in the attacks.

Some stocks on the index gained following the index provider, MSCI's decision to add 30 Saudi Arabian securities, that would represent an aggregate weight of 1.42% in the MSCI Emerging Markets Index.

"MSCI was expected…this is more of rebound after the recent sell–off as there are some names that are now 10-15% cheaper than their recent levels," Nishit Lakhotia, head of research at Bahrain-based SICO.

The three largest additions to the MSCI Emerging Markets Index measured by full company market capitalization would be Saudi Basic Industries Corporation (SABIC), Saudi Telecom Company and Al Rajhi Banking and Investment Corporation, MSCI said.

SABIC rose 2.1%, Saudi Telecom Company rose 1.1% while Al Rajhi Banking and Investment Corp edged 1% higher.

Abu Dhabi's index tumbled 3.5%. First Abu Dhabi Bank, the largest bank in the United Arab Emirates, dropped 9.1% after index provider MSCI decided against increasing FAB's foreign inclusion factor.

"MSCI has surprisingly decided to maintain FAB's weight in the index, despite the recent foreign ownership limit increase," said Jaap Meijer, head of equity research, at Arqaam Capital.

Despite FAB's increase to its foreign ownership limit to 40% from 25%, MSCI has chosen to remain conservative as there has been no information on the sale of stakes held by the ruling family, adds Meijer.

Dubai's index rose 2.5% to snap its seven day losing streak, partly lifted by a 3.8% gain in real estate firm Emaar Properties and its units Emaar Malls and Emaar Development.

Emaar Malls was up 7.5%, while Emaar Development gained 3.7%. MSCI maintained its decision to keep the two real estate firms in the standard index.

Qatar's blue-chip index was up 1.24% after MSCI included two of its major stocks in a index review. Mesaieed Petrochemical Holding Co and Qatar Fuel gained 6.3% and 3.3%, respectively.

(Reporting by Karina Dsouza and Davide Barbuscia; additional reporting by Saeed Azhar, Editing by Angus MacSwan) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))

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