* Doha rises 0.7 pct, up 33 pct in 2014
* Industries Qatar extends rally, seen as dividend play
* Egypt slips but foreign funds again net buyers
* Global Telecom surges before shareholder vote on Djezzy
* Dubai hits 10-week high
By Matt Smith
DUBAI, Aug 21 Qatar's bourse hit a record
closing high on Thursday ahead of MSCI raising the weights of
three Doha-listed firms in its emerging market index. Other Gulf
exchanges were also upbeat as investors shrugged off a renewed
drop in oil prices.
The main Qatari index rose 0.7 percent to 13,776
points, up 33 percent in 2014.
Industries Qatar (IQ) was the main support, rising
1.4 percent. IQ has gained 10.5 percent since it posted a 38
percent drop in second-quarter profit on Aug. 10, missing
The stock's surge is apparently due to the planned increase
in the company's weighting in MSCI's index, and to buying by
"IQ's (dividend) yield could increase - the company is going
to be accumulating cash as its planned capital expenditure is
going to be much lower over the coming years," said Fahd Iqbal,
head of Middle East research at Credit Suisse.
"Until uncertainty over Qatar hosting the World Cup is
resolved, I don't see a growth premium being put on Doha stocks.
But Qatar's dividend yields mean you can still generate a decent
An investigation into the decision to award the 2022 soccer
World Cup to Qatar and the 2018 tournament to Russia is now
likely to be finished in September, FIFA said in July. Qatar has
denied allegations of corruption.
In addition to IQ, Qatar Islamic Bank, which rose
6.0 percent on Thursday, and Qatar National Bank,
which ended flat, are the two other Doha firms that will have
added weight in MSCI's index from the end of this month.
Egypt's index fell 0.7 percent to 9,373 points. It
has been see-sawing since Sunday's six-year peak as local and
regional investors booked profits and foreign funds accumulated
stocks. The latter were net buyers of 92 million Egyptian pounds
($13 million) worth of shares on Thursday.
"It's just a small correction and I expect the market to
rebound next week - turnover is very low," said a Cairo-based
trader who declined to be identified.
He said muted trading - volumes were down by nearly half
from Wednesday - showed selling pressure was weak.
Global Telecom rose 5.0 percent after saying the
fair price for its 51 percent stake in Algerian unit Djezzy was
$2.54 billion, citing a report by financial advisers HC.
Global's parent firm, Russia's Vimplecom, has agreed
to sell the stake in Algeria's biggest telecommunications
operator to the Algerian government for $2.64 billion, a 4
percent premium on HC's valuation.
The company will hold an extraordinary shareholders' meeting
on Aug. 26 to approve the Djezzy sale.
Dubai's index rose 1.1 percent to a 10-week high of
4,908 points, although trading remained thin and with much
activity directed at small-cap firms. The measure has tripled
since the start of 2013.
"There's scope for a short-term buying opportunity when UAE
markets get over-sold and investors who missed out on the rally
of the past couple of years step in," said Iqbal.
Three stocks - Islamic insurer Takaful Emarat,
National Cement Co and Takaful House - made
double-digit percentage gains. Combined, these companies have a
market value of less than $500 million.
Retail traders often target small stocks when there is
little market-moving news because these companies' share prices
are easier to move and so allow quick trading profits.
Saudi Arabia's index climbed 0.2 percent to a new
six-year peak, while Kuwait, Oman and Bahrain
Gulf stocks have been unaffected by a recent slump in oil
prices - there are few listed regional energy companies.
However, weak crude prices have hurt investor sentiment in the
"Oil has an impact through state spending - I wouldn't be
concerned about government budgets being affected unless there
is a large and sustained drop in oil prices," said Credit
Suisse's Iqbal. "We're still above fiscal break-even levels."
Brent crude oil fell towards $101 a barrel on Thursday, just
above a 14-month low, on plentiful fuel supplies and Chinese
economic data pointing to slowing demand.
* The index rose 0.2 percent to 10,735 points.
* The index fell 0.7 percent to 9,373 points.
* The index climbed 1.1 percent to 4,908 points.
* The index slipped 0.07 percent to 5,051 points.
* The index climbed 0.2 percent to 7,350 points.
* The index rose 0.3 percent to 7,359 points.
* The index climbed 0.7 percent to 13,776 points.
* The index rose 0.4 percent to 1,483 points.
(Editing by Andrew Torchia)