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MIDEAST STOCKS-Gulf set to weaken, Egypt may cheer $2 billion Saudi deposit
October 13, 2016 / 5:41 AM / a year ago

MIDEAST STOCKS-Gulf set to weaken, Egypt may cheer $2 billion Saudi deposit

DUBAI, Oct 13 (Reuters) - Stock markets in the Gulf look likely to fall on Thursday after Asian shares pulled back on weak Chinese economic data and U.S. Federal Reserve minutes indicating a likely rate increase in December. But investors in Egyptian equities may welcome news of aid from Saudi Arabia.

MSCI’s broadest index of Asia-Pacific shares outside Japan is down 1 percent and oil prices dropped 1 percent overnight, with Brent futures now at $51.44 a barrel.

Investors in Saudi equities will remain focused on quarterly results. Arab National Bank, a mid-sized lender, reported a 5.6 percent fall in third-quarter profit to 721.7 million riyals ($192.48 million), below the average forecast of five analysts of 796.8 million riyals.

In Egypt, the official state news agency MENA reported overnight that the central bank has received a $2 billion deposit from Saudi Arabia that would help to boost its reserves of foreign currency. The Saudi deposit may also help Egypt fulfill conditions to obtain a $12 billion loan from the International Monetary Fund.

The stock index has dropped 2.2 percent since Sunday on news that Saudi Aramco informed Egypt’s state oil company that it would halt supply of refined oil products to the country; in response, the Egyptian pound tumbled more than 10 percent in the black market to record lows. The central bank deposit news may reassure investors that Saudi Arabia is not abandoning support for Egypt. (Reporting by Celine Aswad; Editing by Andrew Torchia)

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