DUBAI, June 20 (Reuters) - Saudi Arabia's stock market may continue rising on Tuesday before index compiler MSCI decides whether to put Riyadh on a list for possible upgrade to emerging market status, while Abu Dhabi's Dana Gas could climb on news of an investor building a stake.
MSCI will announce its decision after the close. The Saudi stock index surged 2.4 percent on Monday after Mohammed El-Kuwaiz, vice chairman of the Capital Market Authority, was quoted as saying by the Asharq al-Awsat newspaper that he expected Riyadh to be upgraded by the end of 2018 - faster than the mid-2019 date which MSCI's past practice would suggest.
This hope encouraged local funds to buy stocks on Monday and that may continue for another day, although many fund managers think fundemntals are not particularly attractive so a positive decision by MSCI could prompt profit-taking.
In the United Arab Emirates, Dana Gas may attract interest after Goldilocks Investment Co, an open-ended equity fund which is part of Abu Dhabi Financial Group, said it had bought 5 percent of the company.
Goldilocks' brief statement did not say what it intended to do with Dana, but it may be anticipating ultimate success in Dana's efforts to obtain hundreds of millions of dollars in unpaid receivables and damages from Iraqi Kurdistan.
Dubai's National Central Cooling Co (Tabreed) surged its 15 percent daily limit to 2.12 dirhams on Monday after French power and gas group Engie ENGIE.PA agreed to buy a 40 percent stake for 2.8 billion dirhams ($763 million).
The stock may not continue rising sharply for much longer, however, as some analysts think it is close to fair value. Analysts at Arqaam Capital said they were keeping their target price unchanged at 2.32 dirhams, as Tabreed's growth would benefit from Engie's experience but share buy-backs by the company were no longer likely.
Overall, the environment for Gulf markets is neutral to slightly negative; Wall Street rose to record highs overnight but Brent oil futures fell back below $47 a barrel. (Reporting by Andrew Torchia)