Gulf stock markets fell on Tuesday, with the Saudi index leading the losses after MSCI rebalancing that triggered passive fund outflows, while Egyptian stocks also came under pressure. Saudi Arabia’s benchmark index .TASI slid 1.7%, dragged down by a 3.3% drop in Al Rajhi Bank 1120.SE and a 4% plunge in National Commercial Bank 1180.SE. Among other stocks, Saudi Basic Industries 2010.SE and Savola Group 2050.SE eased 3% and 5.6% respectively. Global index provider MSCI on Tuesday implemented the final step of the weight increase of mainland Chinese stocks, or A shares, in its widely followed emerging markets benchmark .MSCIEF. Rebalancing of MSCI resulted in outflows by passive funds, causing some pressure on the market, so some rebound could come into play, said Vrajesh Bhandari senior portfolio manager at Al Mal Capital
In Saudi Arabia, post the Aramco IPO, excess liquidity will return to the broader market, Bhandari added. The Qatari index .QSI slid 1.2% as declining stocks outnumbered the gainers, with Qatar Fuel QFLS.QA down 4.5% and Qatar National Bank QNBK.QA losing 1.9%.
Separately, Turkish and Qatari central banks on Monday increased the overall limit of a swap agreement between them to $5 billion equivalent of lira and riyals, from $3 billion previously.
The deal aims to facilitate bilateral trade in respective local currencies and support the countries’ financial stability. In Dubai, the index .DFMGI ended flat as gains in industrials were offset by losses in property stocks. Budget airline Air Arabia AIRA.DU jumped 4.9% to become the top gainer while logistics company Aramex ARMX.DU closed 2.5% up. In real estate, Emaar Properties EMAR.DU lost 1.4% while Deyaar Development DEYR.DU retreated by 2%.
However, Dubai Islamic Bank DISB.DU gave up early gains to close with a 0.4% decline. The lender called a shareholder meeting for Dec. 17 to approve the acquisition of Noor Bank. The Abu Dhabi index .ADI dropped 0.9% as the country’s largest lender First Abu Dhabi Bank FAB.AD shed 0.8% and telecoms group Etisalat ETISALAT. AD fell 1.7%. Egypt’s blue-chip index .EGX30 dipped 1.4%, with 27 of its 30 stocks declining. Egypt Kuwait Holding EKHO.CA shed 3.5% and Commercial International Bank COMI.CA lost 0.5%.