MIDEAST STOCKS-Masraf Al Rayan boosts Qatar, DAMAC surges on buyout report

July 1 (Reuters) - Qatar’s stock market jumped on Wednesday, boosted by Masraf Al Rayan after the lender and Al Khaliji Commercial Bank said they had started merger talks, while Dubai-listed DAMAC Properties surged on a report its chairman might take it private.

In Qatar, the index advanced 1.5%, boosted by a 6.8% jump in Masraf Al Rayan.

The merger could create a combined entity with more than 164 billion riyals ($45 billion) in total assets.

“The potential merger will lead to the creation of one of the largest Sharia’a (Islamic) compliant banks in Qatar and the Middle East,” the banks said in a filing.

Al Khaliji Commercial Bank, which is not part of the index, leapt 10%.

Dubai’s main share index gained 0.7%, with DAMAC Properties rising 10.7%, its biggest intraday gain since March, following a Reuters report its chairman is weighing a buy out of minority shareholders and taking the company private.

Hussain Sajwani, who founded the company nearly two decades ago, has been exploring the deal since late 2019 after DAMAC’s share price plunged, one source familiar with the matter said.

The benchmark index in Saudi Arabia added 0.2%, supported by a 0.5% gain in Al Rajhi Bank and a 0.7% rise in petrochemical firm Saudi Basic Industries.

The kingdom’s central bank governor Ahmed al-Kholifey, who was speaking at a virtual economic forum, said it was encouraging commercial banks to lend more to sustain businesses during the coronavirus crisis.

In Abu Dhabi, the index was up 0.5%, as the United Arab Emirates’ largest lender First Abu Dhabi Bank gained 0.7%.

$1 = 3.6416 Qatar riyals Reporting by Ateeq Shariff in Bengaluru; Editing by Mark Potter