March 18, 2019 / 1:58 PM / 3 months ago

MIDEAST STOCKS-Saudi closes at near 4-year high as it joins FTSE Russell index

    * Saudi also records best one-day intraday gain since Feb 5
    * All Saudi banks gain
    * 159.2 mln Saudi shares traded for 3.6 bln riyals
    * Abu Dhabi's Dana Gas adds on share buyback plan

    By Shakeel Ahmad and Abinaya Vijayaraghavan
    March 18 (Reuters) - Saudi Arabia's benchmark stock index
closed at its highest in nearly four years on Monday as bank
shares rose on its first day as a member of FTSE Russell's
emerging-market index, which is expected to attract billions in
passive fund inflows.
    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.
    The kingdom is hoping its inclusion in the indexes will fuel
its drive to become a major destination for foreign capital,
after its global reputation was tainted by the murder of
journalist Jamal Khashoggi in October.
    In the short term, the upside is limited since this was a
well-flagged event, Al Mal MENA Equity Fund said in a note. In
the long-term there are positive implications not just for the
Saudi market but for the region as a whole.
    With foreigners, there will be more institutional
participants who are research-driven and bringing more
discipline to the market, the note added. 
    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.
    The index has gained 10 percent this year, outperforming its
major Gulf peers, and foreigners have led the buying, with
foreign investors now net buyers of 9.6 billion riyals of stocks
year-to-date, Arqaam Capital said.
    Saudi's Tadawul index rose 1.1 percent with 159.2
million shares traded for a value of 3.6 billion riyals ($960
million). Al Rajhi Bank gained 0.8 percent and
blue-chip petrochemical maker Saudi Basic Industries (SABIC)
 added 1 percent. 
    "We expect SABIC to see the biggest inflow of more than $110
million while Al Rajhi and National Commercial Bank
are close behind," Nick Wilson, chairman of the Gulf Investment
Fund Plc, said.
    Abdullah Abdul Mohsin Al Khodari Sons surged 10
percent. The stock has risen since shareholders voted against
the dissolution of the company.
    The Abu Dhabi index rose 1.8 percent, lifted by a 3.2
percent rise in First Abu Dhabi Bank.
    International Holding climbed 5 percent after it
called a shareholders' meeting to approve a capital increase by
1.31 billion dirhams ($357 million).
    Dana Gas gained 1.8 percent. On Sunday, the firm
approved plans for a sukuk buyback and said it plans to seek
approval to buy back 690 million shares.
    In Dubai, the index was up 1.6 percent with Dubai
Islamic Bank gaining 3.2 percent. The emirate's
largest listed developer, Emaar Properties, rose 2.2
percent after saying its board will meet on Wednesday to discuss
the proposal for a full-year dividend.
    Marie Salem, director capital markets at FFA Private Bank
Dubai, said foreigners are continuing to accumulate bank shares
across the United Arab Emirates.
    Qatar's index increased 1.1 percent. Qatar Islamic
Bank added 3 percent and the Middle East's largest
lender, Qatar National Bank, rose 1.5 percent.
    Egypt's blue-chip index was down 0.8 percent with
its major lender Commercial International Bank
shedding 1.7 percent.
 ($1 = 3.6728 UAE dirham)
 ($1 = 3.7502 riyals)    
 SAUDI       The index         rose 1.1 pct to 8,653 points
 ABU DHABI   The index        rose 1.8 pct to 5,067 points
 DUBAI       The index          gained 1.6 pct to 2,620 points
 QATAR       The index        rose 1.1 pct to 9,973 points
 EGYPT       The index          fell 0.8 pct to 14,911 points
 KUWAIT      The index        was up 0.3 pct to 5,689 points
 OMAN        The index        rose 1 pct to 4,128 points
 BAHRAIN     The index        edged up 0.2 pct to 1,413 points
 (Reporting by Shakeel Ahmad and Abinaya Vijayaraghavan in
Bengaluru and Saeed Azhar in Dubai; Editing by Hugh Lawson)
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