Most Middle Eastern stock markets fell on Wednesday with Saudi Arabia hit by a broad sell-off, but support for Qatar persisted on expectations of fund inflows when index compiler FTSE includes it in its emerging market index next month. Doha's index rose 0.3 percent to a new nine-month closing high of 11,409 points, extending Tuesday's 2.2 percent rise.
Qatar Insurance gained a further 3.9 percent after rising 3.5 percent on the previous day on hopes the stock will among those included in the FTSE's emerging market index. Qatar National Bank (QNB) added 0.4 percent to 169.10 riyals, taking its gains over the last two days to 7.0 percent. Some analysts believe the market may stay strong into mid-September, when the FTSE change takes effect and passive funds will flow in tracking the index. Akber Khan of Doha-based Al Rayan Investment said: "Judging by the experience of previous upgrades, strength should continue ahead of more than $500 million of passive buying in September."
Other analysts believe news of the upgrade has now been fully priced in, leaving some shares vulnerable to pull-backs. QNB, for example, is now at a 6.5 percent premium to the mean fair value estimate of 10 analysts polled by Reuters. Meanwhile Saudi Arabia's benchmark index fell 1.7 percent to 6,220 points, its lowest close for four months. All 14 listed petrochemical shares declined with bellwether Saudi Basic Industries dropping 2.1 percent. But Saudi Steel Pipes jumped 5.4 percent in unusually heavy trade after it announced that it had been awarded a 127 million riyal ($33.9 million) contract by state oil company Saudi Aramco to supply pipes.
Dubai's main index retreated 0.9 percent to 3,557 points, pulling back further from technical resistance on its April peak of 3,605 points. Emaar Properties lost 1.1 percent and Dubai Financial Market, the only listed exchange in the Gulf, dropped 2.8 percent. Abu Dhabi's index slipped 0.4 percent as bluechip Abu Dhabi Commercial Bank retreated 5 percent.
Cairo's main index fell 0.5 percent, pulling further away from a 14-month high hit on Monday. The index had had risen for most of the past three weeks in response to Egypt's talks with the International Monetary Fund for a loan. Amer Group, a real estate firm, slumped 6.3 percent to 0.30 Egyptian pounds after it reported a 60 percent year-on-year drop in second-quarter net income, after minority interests. Cairo brokerage Naeem attributed the drop in profit to low off-plan sales and operating losses in the restaurant, hotel and shopping mall segments. But analysts at Naeem maintained a "buy" rating on the stock with a target price of 0.92 pounds. Commercial International Bank, a favourite of foreign investors, slipped a further 1.5 percent after falling 0.6 percent on Tuesday.