September 14, 2017 / 2:24 PM / a year ago

MIDEAST STOCKS-Telcos hurt Saudi, Dana Gas up on sukuk hopes, Qatar sinks

* Saudi moves to permit Internet phone calls

* Petchems up as Brent oil heads to $56

* Sukuk holders propose settlement to Dana Gas

* Foreigners are aggressive sellers in Qatar

* Orascom Construction up after JV signs $320 mln deal

By Celine Aswad

DUBAI, Sept 14 (Reuters) - Telecommunications shares weighed on the Saudi Arabian stock market on Thursday after authorities moved to remove the ban on voice and video calls over the Internet, while Qatar continued to fall as foreign buyers intensified their selling.

The Riyadh index fell 0.1 percent as the top three telecommunications providers dropped. Saudi Telecom lost 3.5 percent, the worst performer.

The communications minister said on Wednesday that the government planned to unblock internet voice and video calls which could hurt revenues from traditional phone calls, especially those by the 10 million foreign workers who live in Saudi Arabia calling their home countries.

However, a regulatory process will be involved and it is not yet clear whether all apps will be permitted.

“The headline news hurt the share price today, but it will be positive for the telcos as data usage will increase,” said Iyad Ghulam, senior analyst at NCB Capital.

Ghulam added that shares of STC were hurt most because they were at a premium to the others; STC is at 15.1 times forward 12-month earnings based on Thursday’s closing price, while its regional peers are trading around 12.8 times.

Most Saudi petrochemical shares were robust as Brent crude rose near $56 a barrel; Saudi Basic Industries climbed 0.6 percent.

In Abu Dhabi, Dana Gas climbed 2.5 percent and the index rose 0.6 percent.

Holders of about $700 million of Islamic bonds issued by Dana submitted a proposal to restructure the sukuk to the company’s management, in an effort to end the legal battle over Dana’s refusal to redeem them, a committee for the holders said on Wednesday.

Dana called the proposal unacceptable, however, and it is not clear that it will change the stand-off over the bonds. A court hearing of the case in London is due to start next week.

Dubai’s index ended nearly flat as theme park operator DXB Entertainments fell 1.0 percent in relatively heavy trade.

Qatar’s index continued to slide from Wednesday’s 52-month closing low, dropping a further 0.2 percent; Qatar Navigation slumped 8.8 percent in its heaviest trading volume since 1999, suggesting at least one institutional investor might be bailing out of a major stake.

Thursday’s decline marked the index’s ninth straight losing session. It lost 6 percent during the period, although the pace of decline has been easing since Tuesday.

Foreign investors, who have been net sellers for several weeks largely because of the embargo against Qatar by other Arab states, sold again on Thursday and accounted for a much bigger share of total trade, being responsible for roughly three-fifths of the value traded, bourse data showed.

In Egypt, Orascom Construction jumped 4.6 percent on news that its joint venture with European water company FCC Aqualia had signed a $320 million contract with an Egyptian waste water treatment plant. The venture will also operate and manage the plant for three years.

The Egyptian index rose 1.3 percent. Ibrahim Nimr, head of technical analysis at CI Capital, said the market bucked falls on most global bourses because of positive developments at the Cairo exchange.

Egypt’s new stock exchange chief, Mohamed Farid, said earlier this week that he wants to launch a raft of reforms aimed at increasing trading volumes over the next six months, with the listing of big companies priority.


* The index fell 0.1 percent to 7,373 points.


* The index edged up 0.1 percent to 3,657 points.


* The index rose 0.6 percent to 4,481 points.


* The index lost 0.2 percent to 8,409 points.


* The index increased 1.3 percent to 13,611 points.


* The index fell 0.2 percent to 6,914 points.


* The index edged down 0.2 percent to 1,304 points.


* The index lost 0.3 percent to 5,002 points. (Editing by Andrew Torchia)

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