Qatar Recovers from MSCI Shock

Several major Middle Eastern stock markets rose, led by Qatar, which recovered steep losses triggered the previous day by MSCI's rebalancing of its emerging markets index.

Qatar's stock index tumbled 4.4 percent on Monday as MSCI added overseas-listed Chinese companies to its index, diluting Qatar's weighting and causing an outflow of passive funds. The drop in the Qatari market was magnified by thin turnover and a lack of buying interest.

On Tuesday, Qatar rebounded 4.4 percent. Gulf International Services, the second most active stock on Doha's exchange, surged 10 percent after plunging 9.4 percent on Monday as it was deleted from the MSCI emerging market index.

Qatar Gas Transport, the most heavily traded stock, fell 2.9 percent after climbing 1.3 percent on Monday as it was added to the index.

Some other blue chips jumped, with Islamic bank Masraf Al Rayan up 6.2 percent. "Yesterday's sharp fall of the market was a one-off event, largely magnified by lack of buying interest," said a portfolio manager based in Doha. Local and regional investors were buying on Tuesday, he added.

The Saudi stock index rose 0.7 percent in the heaviest trade so far this week as miner Ma'aden added 2.6 percent.

Emaar Economic City climbed 4.3 percent to a five-week high. It has attracted interest since it said on Sunday last week that authorities, who have been investigating how the firm acquired land in the industrial zone it is developing, would let it keep the land to protect the interests of investors.

PetroRabigh fell 1.6 percent after saying that its high olefin cracker unit and its subordinate units would remain offline until Dec. 30, although it would restart most operations at its refining and petrochemical complex on Thursday after a 50-day planned maintenance period.

Egypt's index climbed 1.1 percent to 6,425 points, bouncing from near technical support on the November low of 6,302 points. Locals were net buyers of stocks while foreigners continued to sell, according to exchange data.

Uncertainty continued to rein about foreign exchange policy. The central bank held the Egyptian pound steady at 7.7301 to the U.S. dollar in a regular foreign exchange auction that caused confusion because some bankers said they were denied dollars.

Later, the central bank said it had revised the way it allocated foreign currency at auction, but gave few details.

After the market closed, it said it had repaid foreign investors in stocks and securities a total of $546 million, clearing a backlog that had built up amid a dollar shortage.

Global Telecom Holding was the top performing Egyptian stock, surging 10 percent to 1.76 Egyptian pounds, after the company announced on Monday that it would combine its Pakistan telecommunications business with local mobile operator Warid Telecom. This confirmed a statement by foreign partner Vimpelcom at the end of last week.

Naeem brokerage said this would be positive for the stock and kept a "buy" recommendation, with a target price of 4.00 pounds.

Qalaa Holdings jumped 4.5 percent after saying its Gozour agrifoods unit had signed deals to sell assets in Sudan and Egypt for about $11 million, as Qalaa continued to sell non-core assets.

The Dubai and Abu Dhabi markets were closed for National Day holidays.