MIDEAST STOCKS-Qatar may fall as deadline looms; Saudi may rise on oil – Reuters

This post was originally published on this site

Qatar’s stock market may come
under pressure on Sunday as a deadline to accept a series of
politcal demands by four Arab states is expected to expire late
in the day with no sign of the crisis ending.

Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman
al-Thani said at the weekend that the demands were made to be
rejected; he insisted Qatar would not close down a Turkish
military base or shut Doha-based satellite channel Al
Jazeera.

The four Arab states have warned they may impose further
sanctions if Qatar does not comply; they did not give details,
but bankers believe, for example, that Saudi, United Arab
Emirates and Bahrain banks may receive official guidance to pull
deposits from Qatar.

However, equities selling pressure in Qatar may only be
moderate. On June 22, the last day on which the market
traded before closing for a week-long Eid al-Fitr holiday,
foreign funds were net buyers of Qatari shares for the first
time since the crisis erupted on June 5.

This suggested some funds are willing to bear the heightened
geopolitical risk because some companies offer attractive
dividend yields, while the market’s plunge last month improved
valuations.

Gulf Cooperation Council investors remained net sellers of
Qatari stocks on June 22, as they have been consistently, but
their pace of selling has been slowing.

Meanwhile Brent oil has risen to $48.77 a barrel,
gaining for seven straight sessions. On June 22, when the Saudi
index last traded before its week-long Eid break, oil
was near $45 a barrel.

This could buoy the Saudi market on Sunday. Sentiment
towards Riyadh has also been optimistic because index compiler
MSCI placed it on a watch list on June 20 for possible upgrade
to emerging market status, and since the architect of Saudi
economic reforms, Prince Mohammed bin Salman, was named crown
prince at about the same time.

The index closed at an October 2015 high on June 22 and is
up 3 percent since the start of the year.
(Reporting by Celine Aswad,; Editing by Andrew Torchia)