Amwal Al Ghad English - 2016-06-14 14:46:35
Gulf stock markets edged up on Tuesday but many investors stood on the sidelines before MSCI's decision later in the day on whether it would consider Saudi Arabia for inclusion in its emerging markets index.
International index compiler MSCI is to announce after the close on Tuesday whether it will put Saudi Arabia on review for possible inclusion as early as mid-2017.
Inclusion would bring billions of dollars of passive foreign funds into the market, but fund managers are split on whether Saudi Arabia is likely to be put on review this year.
Some managers believe the possibility is strong because of an easing of foreign ownership restrictions and reforms to the trading environment announced in early May by the regulatory body, but others think inclusion will not come before mid-2018.
The Saudi index climbed 0.6 percent on Tuesday as Saudi Electricity Co (SEC), the state-controlled utility, jumped its 10 percent daily limit to 20.05 riyals, its highest close since the end of May 2015.
SEC said at the weekend that it was inviting expressions of interest from companies to build two solar power plants; the firms would invest in the plants and sell electricity to SEC in deals that could become models for future infrastructure projects under Saudi Arabia's economic reform plan.
But property developer Dar Al Arkan dropped 3.2 percent as investors booked profits on gains that were triggered by expectations it would benefit from housing construction plans in Saudi Arabia's economic reform plan, announced last week. Emaar the Economic City, another potential beneficiary, fell back 2.0 percent.
In Dubai the main index added 0.2 percent to 3,330 points as Dubai Islamic Bank climbed 2.4 percent and Emaar Properties recovered from early losses to close up 0.3 percent.
"Dubai's stock market witnessed selective buying, heading higher to retest the 3,380 resistance level," said a note by Abu Dhabi's NBAD Securities. The benchmark tested that barrier late last week but failed to break above it.
At current low trading volumes, a breakout above the resistance remains unlikely in the near term, added the note. More»