Saudi stocks trader lower on FTSE index decision

Kuwaiti stocks firm following inclusion in emerging market index

Kuwaiti banks are expected to see healthy income levels following the central bank's relaxation of precautionary provision requirements. AFP

The Saudi stock index fell in early trade on Sunday following news that index compiler FTSE had decided to delay including Riyadh in its secondary emerging market index, while Kuwaiti blue chips were strong after FTSE included Kuwait.

In its annual country classification review on Friday, FTSE praised Riyadh's market reforms but said it would need more time to evaluate their practical impact.

It will therefore assess Saudi Arabia again next March: "It is anticipated that Saudi Arabia will meet the requirements for inclusion as a Secondary Emerging market from early 2018."

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The Saudi index had fallen 0.6 per cent last week amid rumours that FTSE's decision would be negative. On Sunday morning it was down 0.8 per cent and blue chips that would probably be part of the emerging market index bore the brunt of selling; Saudi Basic Industries sank 0.6 per cent and National Commercial Bank lost 1.0 per cent.

FTSE said Kuwait would enter its emerging market index in September 2018. Though the news had been expected by many investors, confirmation of the upgrade boosted stocks such as the region's largest warehousing company Agility, which climbed 1.5 per cent, and National Bank of Kuwait , which jumped 3.4 per cent.

Kuwait's index of the top 15 most valuable shares was up 1.7 per cent, while the main index was up only 0.1 per cent.

Elsewhere, Qatar's index was down 0.3 per cent in thin trade, heading back near a five-year low. Lender Masraf Al Rayan lost 1.7 per cent.

Abu Dhabi's index rose 0.4 per cent on the back of blue chips; First Abu Dhabi Bank was up 0.5 per cent.

The Dubai index edged down 0.2 per cent in quiet trade; Gulf General Investment jumped 4.4 per cent in very thin volume after saying it had completed a Dh2.1 billion debt restructuring that would give it until 2023 to dispose of non-core assets. It did not give details.