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|19 March, 2019

Mideast Stocks: Saudi inches up after index inclusion, Egypt hits 3-month low

29 of Egypt's 30 blue-chip stocks decline

Traders work at the Egyptian stock exchange in Cairo, Egypt April 18, 2016.

Traders work at the Egyptian stock exchange in Cairo, Egypt April 18, 2016.

REUTERS/Mohamed Abd El Ghany

Saudi Arabia's stock index edged up on Tuesday after touching a near-four year high on Monday, which was its first day as a member of FTSE Russell's emerging-market index.

Egypt's blue-chip index, meanwhile, was pulled down by a wide sell-off to its biggest intra-day loss this year.

Saudi's Tadawul index will have a weighting of 2.9 percent in the FTSE Emerging All Cap Index and later this year will join the MSCI emerging market benchmark. The market is positioned for passive fund inflows of around $20 billion. 

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Saudi Arabia's listed companies could see holdings by foreign investors rise to 10 percent when shares are included in index providers MSCI and FTSE's emerging markets indices, Tadawul's Chief Executive told Reuters.0

Saudi's index edged up 0.1 percent with Abdullah Abdul Mohsin Al Khodari Sons 1330.SE surging 10 percent. The stock has jumped in the last four sessions after shareholders voted against the dissolution of the company.

Retailer Fawaz Abdulaziz Alhokair 4240.SE climbed 2.2 percent to 24 riyals after Arqaam Capital upgraded the stock to "buy" and raised its price target to 28 riyals.

Arqaam also said it expects Saudi retailers to post strong numbers in the second half of the year with strong topline growth driving margin expansion.

Egypt's blue-chip index fell 1.8 percent to its biggest intraday loss this year with 29 of its 30 stocks declining.

The two stocks with the most weightage on the index slid considerably, Commercial International Bank slipping 1.8 percent and Global Telecom declining 5.8 percent. The latter said it was still working with the Egyptian Tax Authority to resolve its outstanding tax issues.

In Dubai, the index was up 0.8 percent, rising for a third straight session with most gains coming from its real estate and bank shares. The emirate's largest lender Emirates NBD rose 1.5 percent.

Emaar Properties added 2.1 percent in active trade and DAMAC Propertiesincreased 1.4 percent.

"We are selectively positive on UAE real estate" despite a challenging market in 2019, Arqaam Capital said, adding that a key catalyst for UAE's real estate is GCC investors rotating out of Saudi Arabia around the MSCI index events, as well as near-term dividend announcements.

The Abu Dhabi index was up 0.3 percent lifted by financial stocks with First Abu Dhabi Bank (FAB), the United Arab Emirates' largest lender, trading 0.3 percent higher.

Abu Dhabi Islamic Bank added 2 percent ahead of going ex-dividend on Thursday. Shareholders buying the stock before that day will be entitled to a full-year dividend which the board proposed at 27.4 percent of its share capital.

Qatar's index was down 0.2 percent, hurt by banking sector stocks with Middle East's biggest lender Qatar National Bank shedding 1.2 percent.

Marine transport company Qatar Navigation dived 6.2 percent as it traded ex-dividend.

($1 = 3.7502 riyals) 

(Reporting by Shakeel Ahmad in Bengaluru, editing by Ed Osmond) ((shakeel.ahmad.thomsonreuters.com@reuters.net;))

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