July 20, 2017 / 8:22 AM / a month ago

MIDEAST STOCKS-Gulf mixed in early trade but Qatar continues rebound

DUBAI, July 20 (Reuters) - Gulf stock markets were mixed in early trade on Thursday but Qatar continued rebounding from lows hit early this month because of its diplomatic rift with neighbouring Arab states.

The Qatari index rose 0.6 percent to 9,562 points. It closed at 9,924 points on June 4, just before the crisis erupted.

Doha Bank gained 2.2 percent after reporting that first-half net profit rose to 716‍​ million riyals ($197 million) from 708 million riyals year ago, as operating income gained 4.8 percent.

Drilling rig provider Gulf International Services added 2.5 percent and telecommunications provider Ooredoo surged 2.9 percent.

Marine logistics firm Qatar Navigation pulled back 4.2 percent. It was one of the first stocks to rebound after the crisis began on hopes that it would profit as Qatar reorganised shipment routes for its imports, and it rose above its pre-crisis level. But the stock has stalled in the past couple of weeks as funds have returned to other Qatari stocks.

Quarterly bank earnings and macroeconomic data in recent days have shown that the impact of the crisis on Qatar's economy so far is not as bad as some had feared. Non-Arab foreign investors have been net buyers of stocks, while Gulf investors have continued to cut holdings in Qatar.

Elsewhere, Dubai's index edged down 0.3 percent as Amlak Finance soared 14.3 percent and was the most heavily traded stock after real estate developer DAMAC said it was partnering with Amlak to sell second homes to customers. DAMAC fell 1.3 percent.

Shuaa Capital climbed 5.8 percent after saying it had executed an agreement to acquire Integrated Capital and Integrated Securities, pending final regulatory approvals.

Saudi Arabia's index edged up 0.2 percent as Saudi Basic Industries climbed 0.8 percent to 99.60 riyals. Morgan Stanley raises the stock to overweight from equal-weight and lifted its price target to 122 riyals from 86 riyals.

Alinma Bank, the most heavily traded stock, stayed strong after Wednesday's better-than-expected quarterly earnings, adding a further 2.1 percent. (Reporting by Andrew Torchia; Editing by Gareth Jones)

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