March 7, 2019 / 2:20 PM / 4 months ago

MIDEAST STOCKS-Most Gulf markets fall, Egypt lifted by blue-chips

    * 10 out of 11 banks slide in Saudi
    * Saudi International drops after merger update 
    * Qatar Electricity, Doha Bank push Qatar to 5-month low
    * Egypt's SODIC gains on dividend declaration

    By Abinaya Vijayaraghavan and Ateeq Shariff
    March 7 (Reuters) - Most major Gulf markets slipped sharply
on Thursday, with a possible increase to Islamic tax pulling
down Saudi Arabia's banks and Qatar hitting a five-month low.
    Saudi Arabia's index was down 0.6 percent due to a
sell-off in its bank stocks, with Al Rajhi Bank
shedding 2 percent and the country's largest bank, National
Commercial Bank, declining 2.1 percent.
    The kingdom is considering plans to increase an Islamic tax
paid by local banks to as much as 20 percent, or double the
current rate, Bloomberg reported. 
    Banks have been at loggerheads with the authorities since
last year over additional payments of Zakat - the name of the
religious tax - for years going back as far as 2002.
    Saudi International Petrochemical slipped 1.5
percent. The firm said potential synergies from a possible
merger with Sahara Petrochemical is expected to bring
an extra 175-225 million riyals recurrent EBITDA earnings per
year. Sahara added 0.4 percent.
    The Dubai index fell 1.2 percent, with Emaar
Properties dropping 3.1 percent and Emirates NBD
 sliding 1.6 percent.
    Dubai's property prices were partly behind the index's worst
performance compared with other major markets last year.
    While strong fourth-quarter results from its real estate
firms lifted stocks this year, the sector continues to suffer
from excess supply.
    "The fundamentals, the macroeconomic effect is still
clouding the scene. The uncertainty, the ambiguity, the negative
press investors are seeing are pushing the index down and the
earlier rotation away from Saudi into UAE is kind of dissipating
now," said Talal Samhouri, head of asset management at Amwal LLC
    The Qatar index was down 1 percent to its lowest in
five months as Qatar Electricity and Water dropped 5.4
percent and Doha Bank lost 4.6 percent. Their
shareholders approved amending the nominal value of a share to
one riyal ($0.2667) from 10 riyals, a regulatory decision to
attract investment.
    The Abu Dhabi index fell 1.3 percent, with the United
Arab Emirates' largest lender First Abu Dhabi Bank
losing 2.3 percent and Agthia Group decreasing 3.4
    Growth in the UAE's non-oil sector slowed to a 28-month low
in February amid weaker increase in new business, according to a
survey. The employment index also fell to 47.5 percent.

    The reason for Gulf markets' weakness is "probably a
combination of the employment tracker at its weakest, and in
general investors are getting a bit cautious and taking some
money off the table," said Vrajesh Bhandari, senior portfolio
manager at Al Mal Capital.
    Egypt's blue-chip index was the exception, rising
1.8 percent, as its largest lender Commercial International Bank
Egypt gained 2.5 percent and El Sewedy Electric
 jumped 5.6 percent.
    Sixth Of October Development And Investment hiked
3.1 percent after posting a rise in full-year operating revenue
and declared its first dividend payout since 2011.

 SAUDI ARABIA  The index         slipped 0.6 pct to 8,479 points
 DUBAI         The index          was down 1.2 pct at 2,595
 QATAR         The index        fell 1 pct to 9,781 points
 ABU DHABI     The index        lost 1.3 pct to 4,914 points
 EGYPT         The index          was up 1.8 pct at 14,904 points
 KUWAIT        The index        was flat at 5,597 points
 OMAN          The index        lost 1 pct to 4,113 points
 BAHRAIN       The index        dropped 0.1 pct to 1,409 points

 (Reporting by Ateeq Shariff and Abinaya Vijayaraghavan in
Additional reporting by Nafisa Eltahir in Dubai;
Editing by Andrew Cawthorne)
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