Qatar Exchange index flat, UAE bourses retreat after MSCI move

June 02, 2014 - 6:52:04 am
Traders work at the Egyptian Stock Exchange in Cairo yesterday.

Doha/DUBAI: Qatar Exchange ended in the green area yesterday by adding just 2.79 points, 0.02 percent, to close at 13,696.98 points from 13,694.19 on Thursday.

But the volume of the shares traded was down to 37,388,257 from 76,113,303 on Thursday.Among the top gainers were Qatar National Bank which was up 1.92 percent to QR185.50, Al Ahli Bank gained 2.79 percent to QR51.50, Industries Qatar added 0.11 percent to QR51.50 and Electricity and Water up by 1 percent to QR.202.

Meanwhile, United Arab Emirates stock markets pulled back yesterday after surging during the run-up to their upgrade by index compiler MSCI, while Egypt’s market continued to slide in response to the government’s plan for a capital gains tax.

Abu Dhabi jumped 5.5 percent and Dubai gained 5.0 percent last Thursday on large one-off purchases by passive funds that track MSCI’s emerging market index.

MSCI added nine firms from the UAE and ten stocks from Qatar to the index on Friday, upgrading them from frontier market status.

As passive funds’ buying faded yesterday, eight out of nine of the upgraded UAE stocks declined on profit-taking, the only exception being Aldar Properties, which added 0.2 percent. Port operator DP World, which trades on Nasdaq Dubai, led losses, tumbling 6.8 percent.

“There is some residual buying from passive funds,” said Ali Adou, asset manager at The National Investor. “But those names (which jumped most on Thursday) are underperforming the market.”

Total traded value fell on both markets compared with Thursday, another signal that the peak of foreign fund inflows related to the MSCI adjustments had passed.

Kuwait could also expect fresh fund inflows from the MSCI decision because it became the biggest market in MSCI’s frontier market index as the UAE and Qatar exited that benchmark.

However, trading suggested the peak of inflows had passed in Kuwait too. The bourse’s blue-chip index fell 0.6 percent on declining turnover, although the broader index gained 0.4 percent.

Egypt’s bourse was the biggest loser in the region yesterday as the benchmark fell 4.2 percent, its biggest daily drop in almost a year. The market has come under pressure after the government approved the introduction of a 10 percent capital gains tax on profits made in the stock market.

The tax decision was initially announced on Thursday, driving the main index down 3.5 percent. Yesterday, the exchange halted trading for half an hour after its broad index dropped 5 percent.

Both benchmarks recovered slightly after the break and the main index closed at 7,895 points. Technicals suggest the market’s long uptrend since the ouster of President Mohamed Mursi last July may now have ended for the time being; 14-week momentum shows a negative divergence, a classic sign of the end of an uptrend. QNA/Reuters

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