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Sun 31 May 2015 05:48 PM

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Qatar's bourse rebounds as World Cup 2022 fears ease

Qatar index which had lost more than 4% in response to FIFA arrests, climbs 1.2% on Sunday

Qatar's bourse rebounds as World Cup 2022 fears ease

Qatar's stock market rebounded on Sunday after dropping at the end of last week on MSCI index adjustments and news of arrests and criminal probes at world soccer body FIFA. Other markets in the Middle East were mostly negative.

The Qatari World Cup organising committee defended its successful 2022 World Cup bid on Friday and FIFA President Sepp Blatter secured re-election for a fifth term, partially easing concern that Doha might conceivably lose the tournament hosting rights.

Qatar's stock index, which had lost 4.1 percent in response to the FIFA news last week, climbed 1.2 percent on Sunday. Petrochemicals giant Industries Qatar jumped 2.3 percent, also supported by oil's 5 percent surge on Friday.

But Ezdan Holding fell 0.9 percent, having tumbled its daily 10 percent limit on Thursday. The stock had surged ahead of its inclusion in MSCI's emerging markets index, and investors started booking profits after passive funds tracking that benchmark adjusted their positions at the end of last week.

On the other hand, stocks that had been depressed by Ezdan's inclusion, which reduced the weightings of other index constituents, bounced back. Telecommunications firms Ooredoo and Vodafone Qatar, for instance, surged 6.9 and 10.0 percent respectively.

Similarly, National Bank of Abu Dhabi rose 1.9 percent on Sunday after dropping 4.1 percent in the previous session on reshuffling by passive funds which diverted some money towards newly included stocks and those whose weightings were increased. Abu Dhabi's index rose 0.3 percent.

One of the additions to the MSCI index was Dubai's Emaar Malls, which tumbled 4.9 percent on Sunday after surging 6.4 percent on Thursday.

Most other stocks in Dubai also fell and its main index lost 1.9 percent, hitting a six-week low of 3,923 points.

Saudi Arabia's main index edged down 0.7 percent as most stocks declined and trading volume was low compared with activity in the last few weeks.

A fresh bomb attack by the Islamic State group may have hurt retail investor sentiment in the kingdom. An Islamist militant suicide bomber disguised as a woman blew himself up outside a Shi'ite mosque in the eastern city of Dammam on Friday, killing three other people. A week earlier, another attack at a Shi'ite mosque killed 21 and wounded nearly 100 people.

Also, central bank data showed on Thursday that growth in bank lending to the private sector in Saudi Arabia slowed to an annual 9.5 percent in April, the lowest rate since September 2011.

Petrochemicals firm PetroRabigh dropped 2.2 percent to a one month-low of 23.45 riyals after the company said on Sunday it had shut down a hydrogen-producing facility on May 29 because of faulty pipes. PetroRabigh said it was still assessing maintenance work needed as well as the financial impact of the stoppage.

A monthly Reuters survey of 15 leading Middle Eastern investment firms, published on Sunday, found 27 percent planning to cut their allocations to Saudi equities in the next three months and just 7 percent expecting to increase them.

They cited factors including high valuations and restrictive rules covering the opening of the market to direct foreign investment in June.

Egypt's index fell 1.5 percent on Sunday as most stocks traded lower, continuing a decline which began last week as Egypt's weighting in MSCI's emerging markets index was reduced with Telecom Egypt's exclusion from the benchmark.

Also, Egypt started rationing gas supplies to a number of industrial consumers, such as steelmaker Ezz Steel, last week as a rise of temperatures across the country led to an increase in power consumption.

Ezz Steel shares dropped 3.1 percent on Sunday and Telecom Egypt was down 3.4 percent.

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