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DUBAI - Saudi Arabia's stock index fell on Monday on rumours that index compiler FTSE might not upgrade Riyadh to emerging-market status as quickly as hoped, while Qatar notched up its fifth straight session of gains.
At the end of the business day on Sept. 29, FTSE will announce its decision on whether to include Saudi Arabia in its secondary emerging market index.
For several weeks the market had been pricing in a strong chance of an upgrade. Analysts have predicted Saudi Arabia could see around $3.2 billion to $3.7 billion of passive fund inflows as a result, although that would not occur until the decision actually took effect, probably in late 2018.
Two fund managers told Reuters that the Saudi stock index
"These are rumours, which cannot be validated or verified until FTSE makes the announcement - nevertheless they were strong enough to create nervousness in the market today," said one fund manager, who declined to be named.
Shares in major companies that would probably be included in FTSE's emerging market index were some of the worst performers on Monday. Samba Financial Group
In Abu Dhabi, Dana Gas
The trial focuses on Dana's June announcement that it would not redeem its sukuk on the grounds that changes in Islamic financial practice had made them unlawful in the United Arab Emirates. It is not clear when the London court will rule or whether a ruling will end the dispute, which is also being fought in a UAE court.
Most other Abu Dhabi shares were weak, dragging the index
Qatar's index
Fund managers from the six-nation Gulf Cooperation Council, excluding Qatar, dumped Qatari equities after four Arab states cut ties with Doha in June. It was not clear whether some GCC investors were now buying because they hoped for a resolution of the dispute.
A little under two-thirds of the 20 most valuable Qatari companies rose on Monday, including Qatar Islamic Bank
In Egypt, the index
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(Editing by Andrew Torchia, Larry King) ((celine.aswad@thomsonreuters.com)(+971 5 6224 7653)(Reuters Messaging: celine.aswad.thomsonreuters.com@reuters.net))