* Year-end holidays cause lowest Saudi trading volume in years
* But some investors buy blue chips before fund inflows
* Saudi Advanced Industries jumps on dividend proposal
* Gulf Finance House soars in Dubai
* Qatar’s Widam Food rises above chart barrier
By Andrew Torchia
DUBAI, Dec 30 (Reuters) - Saudi Arabia’s stock market was the only bright spot in a sluggish Middle East on Sunday as most bourses moved sideways in trade thinned by the absence of some investors for year-end holidays.
The Saudi market has been dampened in the last few months by falling oil prices and geopolitical worries linked to the killing of journalist Jamal Khashoggi.
However, many fund managers expect a rally in the new year in anticipation of some $15 billion of passive funds that are due to enter the bourse when it joins emerging market indexes.
Riyadh will join FTSE Russell’s index in stages between March and December 2019, while it will join MSCI’s index in phases coinciding with index reviews in May and August.
Saudi blue-chip banks and petrochemical firms that are likely to be bought by the passive funds were strong on Sunday. The stock index climbed 0.8 percent as Saudi Basic Industries, for example, rose 1.2 percent.
However trading volume in the market was at its lowest since April 2014, according to Refinitiv data, and the lack of liquidity may have magnified rises in some stocks.
Saudi Advanced Industries surged 4.8 percent after its board proposed a nine-month cash dividend of 0.25 riyals per share.
Dubai’s index was almost flat. Union Properties , which in recent days has been rebounding from five-year lows, added a further 1.2 percent and was the most heavily traded stock. Gulf Finance House, the second most heavily traded, soared 9.2 percent. The company said the Islamic International Rating Agency had reaffirmed its international ratings with a stable outlook, and that it would work towards achieving profitable exits from investments to benefit shareholders. In Qatar the index was also almost flat, although Widam Food added 3.4 percent to 69.00 riyals in unusually heavy trade, rising above technical resistance at the early December peaks of 68.50 riyals.
Egypt’s index fell 0.3 percent, although Orascom Investments rose 2.1 percent as it released a statement clarifying its exemption from international restrictions on foreign investment in North Korea.
* The index rose 0.8 percent to 7,810 points
* The EGX 30 Index fell 0.3 percent to 12,945 points
* The index edged up 0.04 percent to 2,470 points
* The index edged down 0.2 percent to 4,823 points
* The Index edged down 0.04 percent to 10,284 points
* The index edged down 0.04 percent to 5,265 points
* The index rose 0.8 percent to 1,332 points
* The index edged down 0.1 percent to 4,341 points (Reporting by Andrew Torchia; Editing by Jan Harvey)