Qatar slumps ahead of FTSE inclusion, Saudi drops

MIDEAST STOCK MARKETS

Qatar’s main equity index slumped 4.0 percent yesterday ahead of the additions of some companies in FTSE’s secondary emerging market index, while Saudi Arabia dropped as investors grew weary of further austerity expected to come into effect next month.

Doha suffered from its largest single day drop since January in the heaviest turnover so far this year. Shares in companies set to be included in index compiler FTSE’s secondary emerging market index on Sept. 20 were the top losers, with mobile phone operator Ooredoo and Islamic lender Masraf Al-Rayan each falling 5.1 percent. Fund managers said the correction was expected as the rally in anticipation of inclusion in the FTSE index had taken some company valuations above fair value.

Saudi Arabia’s stock index dropped 2.1 percent to 5,936 points, only 25 points shy of the technical support on the August low. Nine-tenth of the traded shares declined. Although volume was double that of Sunday’s, the general lack of liquidity in the market is one of the greatest concerns, said Santhosh Balakrishnan, equity analyst at Riyad Capital. “There has been less participation in the market comparatively, and this is the first year that there is no grand re-opening of the markets after the Eid holidays.” Saudi Kayan Petrochemical dropped 3.1 percent and the largest Islamic bank Al Rajhi Bank dropped 3.1 percent.

Uncertainty over further austerity hit sentiment, according to local media, the government is expected to hike fees on services including driving licenses, traffic violations, port fees and several other municipal services on Oct. 2. Last month the cabinet, seeking to boost state revenues in an era of low oil prices, approved proposals to raise a range of government fees including visa charges and fines for some traffic violations.

The insurance sub-index, usually favored by local retail traders, fell 4.1 percent. “In a time of uncertainty no one takes fresh positions and they tend to stay away until clarity comes back,”

DUBAI STEADIES, EGYPT CLIMBS

Global stocks drew support from expectations that the US Federal Reserve would skip a chance to raise rates this week and this helped support Dubai’s index, which attracts foreign investors.

The index held onto small gains and added 0.04 percent, with gainers outnumbering losers 13 to 10. The largest listed developer Emaar Properties added 0.4 percent. But some shares which have been outperforming over the last two sessions pulled back, with GFH Financial Group dropping 2.9 percent and Shuaa Capital declining 0.6 percent.

But in Abu Dhabi, the equity index dipped 0.1 percent with main drag from large-cap lenders. Union National Bank fell 3.9 percent and Abu Dhabi Commercial Bank lost 0.6 percent. In Egypt, the main index rose 0.7 percent as two-thirds of the most valuable stocks advanced. Shares favored by foreign funds were some of the top performers, with Global Telecom Holding jumping 4.0 percent. —Reuters