(MENAFN- The Peninsula) Qatar Exchange index dropped points 86.88 points or 0.73 percent when the bourse closed trading at 11,892.95 points yesterday. The market capitalisation decreased to QR639.18bn from QR643.50bn registered on Thursday.
The trading value fell to QR273.43m with a volume of 7,917,985 shares from 4,022 transactions compared to QR468.64m with a volume of 11,117,583 shares from 6,357 transactions registered on Thursday. Indices of two sectors advanced yesterday while five dropped.
The transport index gained 0.92 percent (2,454.43 points) and insurance was up 0.07 percent (4,098.54 points). QE Total Return Index fell 0.73 percent (18,480.71 points). QE Al Rayan Islamic Index fell 0.45 percent (4,500.31 points). QE All Share Index fell 0.58 percent (3,177.85 points). Of the 43 companies listed, shares of 40 saw trading. From these, 12 advanced, 24 declined and four remained unchanged.
Meanwhile, Saudi Arabia's bourse surged after the kingdom's securities regulator said it would open the market to direct foreign investment from June 15, while many other markets in the Middle East were weak.
The main Saudi index rose 4 percent, its biggest gain this year, to 9,620 points on its highest volume in 11 months. It broke minor technical resistance at the late March high of 9,377 points and stood above the 200-day average, now at 9,572 points.
The kingdom announced last July that it would permit direct foreign purchases of shares in the first half of 2015, as a way to expose companies to market discipline, diversify the economy beyond oil and create jobs.
The Capital Market Authority announced after the close on Thursday that qualified foreign institutions would be able buy shares from mid-June and that the final rules covering this would be published on May 4. Up to now, foreigners have been restricted to buying Saudi shares indirectly through swaps or exchange-traded funds.
Fresh fund flows into Saudi Arabia in the initial months may be moderate - perhaps only hundreds of millions of dollars a month - partly because share valuations are currently quite high. Saudi Arabia's forward price-to-earnings ratio of 16.2 is on a par with those of the Dow Jones Industrial Average and FTSE 100, and well above other Gulf markets.
But the announcement nevertheless buoyed investor sentiment, as the market opening is likely to start the process of incorporating Saudi Arabia into major equity indexes such as those run by MSCI, which will eventually attract tens of billions of dollars.
Saudi Basic Industries Corp), which is expected to be a major target of foreign investors as the country's biggest listed firm, surged its daily 10 percent limit yesterday. It reported a 39 percent drop in first-quarter net income that was not as large a fall as analysts had forecast.
Shares in several other petrochemical firms such as Saudi Kayan, Yanbu National and Saudi Industrial Investment Group also rose their daily 10 percent limits on Sunday. Banking heavyweights Al Rajhi and National Commercial Bank jumped 3.7 and 3.4 percent respectively.
Several other Gulf markets fell. Dubai's index fell 1.4 percent after surging 8.1 percent in the three previous sessions, though property developer Damac extended gains in its highest daily trading volume on record.
The stock, which listed in Dubai in January, surged as much as 7.2 percent during the day, hitting a new all-time high of Dh3.11. But it gave up most of those gains and closed just 2.1 percent higher at Dh2.96. Damac's board will discuss the company's dividend distribution policy, along with first-quarter results, at a meeting on April 21. Abu Dhabi edged down 0.7 percent. Kuwait added 0.7 percent and Oman's bourse inched up 0.05 percent.
Some Gulf investors may be cashing out of the UAE and Qatar in order to invest in Saudi Arabia's bourse. According to Doha bourse data, for instance, Gulf investors sold almost twice as many stocks as they bought yesterday.
Unlike other foreigners, Gulf investors can already trade Saudi stocks freely, so they may try to profit from front-running foreigners, as they did in the UAE and Qatar last year when the two countries were upgraded to emerging market status by major index compilers. Egypt's bourse fell 1.4 percent.
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