March 3, 2019 / 2:54 PM / 3 months ago

UPDATE 1-MIDEAST STOCKS-Saudi index rises as FTSE Russell countdown begins

    * Saudi index up 9 pct in 2019, outperforming Gulf peers
    * Saudi's entry to FTSE Russell emerging index on March 18
    * Kuwait index jumps on banking rally 
    * Dubai rebounds after last week's profit-taking

 (Adds revised Egypt index closing prices)
    By Saeed Azhar
    DUBAI, March 3 (Reuters) - Saudi stocks ended higher on
Sunday, helped by optimism over fund inflows ahead of the entry
by the Gulf's biggest market to the FTSE Russell's emerging
market index in a little more than  two weeks.
    The Tadawul main index was up 0.5 percent, led by
financial stocks. Samba Financial Group rose 1.1
percent and Al Rajhi Bank climbed 0.4 percent.
    Al Tayyar Travel Group surged 5.7 percent as
investors looked beyond its 2018 full-year loss to take comfort
from its plans to raise 3 billion riyals ($800 million) in fresh
capital.
    One trader, who asked not to be named, said speculation
around a possible takeover of Dubai-based ride-hailing firm
Careem by Uber Technologies           is also fuelling gains in
Al Tayyar's stocks, given the company's minority stake in
Careem.
    Saudi Arabia's stock exchange expects passive fund inflows
of $15 billion to $20 billion this year as it gears up for
inclusion in emerging market benchmarks, its chief executive
told Reuters on Thursday.
    "The first phase of FTSE inclusion should drive in 10
percent of the estimated total $6 billion in passive flows into
the Saudi market," said Vrajesh Bhandari, a senior portfolio
manager at Al Mal Capital.
    He said bigger moves are expected when global index provider
MSCI adds Saudi stocks to its global benchmark in two tranches
in May and August, but he cautioned that the Saudi market's
valuation appears rich.
    The Saudi index has gained about 9 percent this year and is
outperforming its Gulf peers, with its shares trading at nearly
17 times earnings. 
    Bhandari said the Saudi market's rise could be capped by a
slower earnings growth compared with other emerging markets.
    Saudi stocks will be the largest Middle East market in the
FTSE Emerging Index with an overall weighting of 2.7 percent,
according to the index-compiler FTSE Russell said.
    The inclusion will happen in several tranches and will be
completed by December this year. The first 25 percent tranche
will be added from March 18, according to the FTSE Russell
document. 
    Dubai stocks were up 0.3, rebounding from a
sell-off on Friday when profit-taking set in after a sharp rally
in property stocks on strong fourth-quarter earnings at
companies linked to Emaar Properties.
    Shares of DAMAC Properties jumped by 5.8 percent
and Emaar Malls rose 1.7 percent.
    Although the Dubai index has rallied this year, led by
strong fourth-quarter results at real estate firms, an expected
further fall in property prices is capping gains.
    The Kuwaiti index gained 0.8 percent fueled by
banking stocks. Burgan Bank ended 1.9 percent up after
recently posting a rise in quarterly earnings. Kuwait Finance
House rose nearly 1 percent.
    Egyptian stocks, which have been the best
performers in the Middle East this year with gains of 13.7
percent, ended 0.1 percent up on Sunday, led by financials.
    Gains were capped by selling in Global Telecom Holding
, which dropped 1.5 percent. 
    The stock has been volatile since Amsterdam-based VEON
Holdings, an existing shareholder, submitted a recent mandatory
takeover offer for the telecoms company.     
 SAUDI       The index         rose 0.5 pct to 8,534 points
 ARABIA      
 DUBAI       The index          rose 0.3 pct to 2,642 points
 QATAR       The market was closed for a holiday
 ABU DHABI   The index        fell 0.3 pct to 5120 points
 EGYPT       The index          rose 0.1 pct to 14,820 points
 KUWAIT      The index        rose 0.8 pct to 5,525 points
 OMAN        The index        fell 0.2 pct to 4,138 points
 BAHRAIN     The index        rose 0.3 pct to 1,417 points
 
($1 = 3.6728 UAE dirham)
($1 = 3.7502 riyals)

 (Additional reporting by Marwa Rashad
Editing by Raissa Kasolowsky and David Goodman)
  
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