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Stock markets in the Middle East diverged yesterday with the insurance sector boosting Saudi Arabia and a depreciating currency lifting export and real estate shares in Egypt, while blue chips weighed on the United Arab Emirates and Qatar.
The Qatari stock index closed down 0.2 percent as most banking shares fell, with Qatar Islamic Bank losing 1.1 percent.
In Qatar, 20 companies saw a doubling of their investible weight factors yesterday in the second phase of Qatar's upgrade by FTSE Russell to secondary emerging market status. Analysts estimated the increased weights could attract over $300m of fresh, passive funds to Qatar. But only nine of those companies rose yesterday; telecommunications operator Ooredoo was the top performer amongst them, adding 0.9 percent. Many local investors had tried to front-run buying by the passive funds so there was heavy selling when the funds bought in the past two days.
Saudi Arabia's index added 0.5 percent as the insurance sector surged. All but three of the 35 listed insurers rose, with Solidarity Saudi Takaful jumping 3.8 percent after it said it had reduced its accumulated losses to below 50 percent of its capital.
Last week Amana Cooperative Insurance Co said its accumulated losses had been reduced below 50 percent of its capital; its shares rose a further 0.8 percent yeserday.
Analysts at Albilad Capital said in a report that their longer-term view of the insurance sector was positive, despite insurance spending per capita recording a decline for the first time in five years during 2016 as the Saudi economy slumped. Another Riyadh-based analyst, however, said fierce competition in the sector meant it was hard for many companies to grow. "So if they have investors who have deep pockets, they will raise their capital. Otherwise most can only reduce accumulated losses," he said.
Elsewhere on the Saudi market, holding company Astra Industrial Group rose 1.9 percent after its board recommended a dividend for 2016 of SAR0.5 per share, lower than the cash payout of SAR0.75 a year earlier but higher than some had expected.
Dubai's index lost 0.8 percent in very thin trade; heavyweight Emaar Properties dropped 2.7 percent. Shuaa Capital fell 0.5 percent and GFH Financial fell 1.8 percent. Last week shares of both firms surged on investors' speculation and later confirmation from both companies that they were in preliminary talks on a possible merger.
Kuwait's index, which has been outperforming its peers since the start of the year, rose 0.7 percent. Telecommunications operator Zain jumped 3.5 percent and the region's largest logistics company, Agility, closed 1.6 percent higher.
Egypt's index added 0.8 percent to 13,092 points. It is now up 10.5 percent from this year's low, hit on February 28, largely because the Egyptian pound has started to depreciate against the US dollar again after strengthening in February.
Export-oriented shares that could benefit from a weak pound, and real estate shares which are seen as a hedge against currency depreciation, were some of the top gainers
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