Saudi Arabia's stock exchange recovered from earlier losses to close a touch higher on Monday amid expectations of billions of dollars more in passive fund inflows, while Abu Dhabi fell for a third straight session. The Saudi index inched up 0.1% with Al Rajhi Bank rising 0.7% and Riyad Bank gaining 1.5%. The Saudi Stock Exchange expects additional passive funds' inflows worth $3 billion from the remaining phases of inclusion in the FTSE Russell emerging market index starting in September.
Three of an eventual five tranches of Saudi stocks have been added to the FTSE emerging-market index so far this year. Saudi gains in 2019 were as high as 20% in May, outperforming most regional markets ahead of the inclusion of Saudi stocks in the MSCI emerging markets index, which attracted billions of dollars from foreign investors. They have been net buyers every month this year.
In August, the Saudi exchange completed the second and final phase of joining the MSCI index, raising its weight on the closely-monitored index to 2.8%.
However, the index has reduced its gains for the year to 2.7% as the US-China trade dispute and regional geopolitics dampened investor sentiment.
Abu Dhabi's index was down 0.6%. Emirates Telecommunications Group dropped 1.2% and Abu Dhabi Commercial Bank lost 1.9%. Dhabi's index closed 0.3% higher, led by gains in market heavyweight Dubai Islamic Bank which rose 0.8%. Real estate shares, which have been on the back foot in recent sessions, also gained. Blue-chip developer Emaar Properties rose 0.4%, ending a four-day losing streak.
Dubai property prices, having tumbled 25-35% since a mid-2014 peak, are facing further downward pressure and are expected to decline sharply this year and next as a slowdown in the economy and an oversupply of housing units pose big downside risks to their already weak outlook, a Reuters poll found. The Qatari Index also gained 0.3% as telecom operator Ooredoo rose 3.6% and Mesaieed Petrochemical added 2.5%. Outside the Gulf, Egypt's blue-chip index was down 0.3% with the country's largest lender Commercial International Bank shedding 0.2% and cigarette maker Eastern Co losing 1%.
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