Banking shares hurt Saudi stocks; other major Gulf up

Saudi stocks slipped on Thursday, extending losses for the second straight session pressured by banking shares, as receding fund inflows continued to keep investors at bay while other major Gulf markets rose.

On Wednesday, a second batch of Saudi shares was added to the MSCI emerging markets index but the move failed to lift the market as funds remain bearish.

Sixty percent of fund managers said they would reduce their investments in Saudi Arabia, displaying bearishness that has carried over from last month.

The Saudi index fell 0.3 percent with Banque Saudi Fransi declining 1.1 percent and Saudi Basic Industries losing 0.4 percent.

On Wednesday, investment bank EFG Hermes said in a note that the investment case for Saudi banks is no longer compelling in their view on the backdrop of receding passive flows, rates becoming a headwind, and the emergence of credit quality concerns.

In Qatar, the index increased 0.8 percent, led by a 2 percent rise in lender Masraf Al Rayan and a 1.4 percent gain in Industries Qatar.

The Dubai Financial Market General Index was up 0.2 percent, helped by financial stocks. Dubai Islamic Bank, the United Arab Emirates’ largest sharia-compliant lender, and Dubai Investments both were up 0.8 percent.

Abu Dhabi index also rose 0.2 percent, largely driven by Emirates Telecommunications, which was up 0.6 percent.

Source: Reuters