Gulf markets firm

Dubai: Gulf stock markets rose yesterday but many investors stood on the sidelines before MSCI’s decision on whether it would consider Saudi Arabia for inclusion in its emerging markets index. Bahrain remained unchanged at 1,123 points.

International index compiler MSCI is to announce whether it will put Saudi Arabia on review for possible inclusion as early as mid-2017.

Inclusion would bring billions of dollars of passive foreign funds into the market, but fund managers are split on whether Saudi Arabia is likely to be put on review this year.

Some managers believe the possibility is strong because of an easing of foreign ownership restrictions and reforms to the trading environment announced in early May by the regulatory body, but others think inclusion will not come before mid-2018.

The Saudi index climbed 0.6pc yesterday as Saudi Electricity Co (SEC), the state-controlled utility, jumped its 10pc daily limit to 20.05 riyals, its highest close since the end of May 2015.

SEC said at the weekend that it was inviting expressions of interest from companies to build two solar power plants; the firms would invest in the plants and sell electricity to SEC in deals that could become models for future infrastructure projects under Saudi Arabia’s economic reform plan.

In Dubai the main index added 0.2pc to 3,330 points as Dubai Islamic Bank climbed 2.4pc and Emaar Properties recovered from early losses to close up 0.3pc. “Dubai’s stock market witnessed selective buying, heading higher to retest the 3,380 resistance level,” said a note by Abu Dhabi’s NBAD Securities. 

The two largest listed stocks on Abu Dhabi’s exchange, Etisalat and First Gulf Bank, helped pull the index up 0.5pc.

Etisalat, which rose 0.8pc, and First Gulf, which added 0.4pc, are constituents of the MSCI emerging market index, may see a small outflow of funds if MSCI decides on Tuesday to include China A-shares in the index.

Cairo’s main index dropped 1.0pc as Orascom Telecom retreated a further 3.1pc. Shares in the conglomerate have now fallen 11.4pc since Sunday after a plan by its unit Beltone to acquire CI Capital from Commercial International Bank (CIB) was called off because it failed to win regulatory approval.

CIB, a constituent of the MSCI emerging market index, fell 1.5pc on Tuesday. In other markets, Kuwait index was flat at 5,412 points, while Oman edged down 0.2pc to 5,839 points.