Saudi, Qatar stocks may surge on FTSE index review

Qatar’s stock market may rise Sunday after index compiler FTSE upgraded the country to emerging market status from frontier and Saudi Arabia may also gain after being listed as a candidate for an upgrade.

FTSE said on Friday that Qatar’s inclusion as a “secondary emerging market” would be completed in two tranches. The first one will be implemented in September 2016 and the second in March 2017 semi-annual review.

“We estimate that Qatar will account for 1.19 percent of FTSE emerging markets and will see inflows from FTSE trackers of around $1.1 billion,” said Mohamad Al Hajj, MENA strategy associate at EFG Hermes in Dubai.

FTSE has also added Saudi Arabia to its watch list for possible inclusion in the emerging markets category. Kuwait remains on the same watch list.

The background for other Gulf markets is less positive as crude futures fell on Friday after influential Wall Street trader Goldman Sachs cut its outlook on oil. U.S. crude settled 2.8 percent down, at $44.63 a barrel. Brent lost 1.5 percent to $48.59.

Egyptian investors, who have expressed disappointment with the slow pace of reforms, may react positively to the news of a government reshuffle.

President Abdel Fattah al-Sisi on Saturday asked Oil Minister Sherif Ismail to form a new cabinet within one week after the government submitted its resignation, one week after the authorities arrested Egypt’s agriculture minister over corruption allegations.

Global equity markets traded mixed on Friday as investors assessed the economic outlook and a potential move by the Federal Reserve next week to raise interest rates.

Source: Reuters