May 30, 2018 / 2:10 PM / a year ago

MIDEAST STOCKS-Qatar leads Gulf down in quiet trade, QNB retreats from high

* Big Qatar banks retreat in heavy volume

* They had surged since MSCI announced weighting boost in mid-May

* Dubai falls below level at time of visas announcement

* But DXB Entertainments surges

* Saudi’s Al Tayyar rises after loan repayment news (.)

By Alexander Cornwell

DUBAI, May 30 (Reuters) - Gulf stock markets mostly dropped on Wednesday in modest volumes, led by Qatar, where top lender Qatar National Bank (QNB) and several other blue-chips fell sharply on profit-taking.

Qatar’s index lost 2.3 percent as Qatar Islamic Bank (QIB) fell 4.7 percent in heavy trade; its unit QInvest reported first-quarter net profit of 1.7 million riyals, down from 15 million riyals a year ago.

QNB, which had on Tuesday surged to its highest level since December 2014, fell back 2.1 percent in heavy volume. Qatar Electricity and Water declined 4.1 percent and heavyweight Industries Qatar ended 3.9 percent lower.

Both QNB and QIB had risen sharply since mid-May, when equity index compiler MSCI said it would increase their weightings at the end of this month after the companies increased their foreign ownership ceilings.

On Wednesday, buying by passive funds tracking the weightings continued but many other investors took profits, accounting for the big trading volumes.

Meanwhile, the Dubai index slipped 0.5 percent, dragged down by property and banking shares such as DAMAC , which fell 2.5 percent.

The Dubai index dropped back below the level where it was trading at the start of last week when the United Arab Emirates announced it would grant long-term visas of up to 10 years to some foreigners, and raise the ceiling for foreign ownership of companies in some sectors.

The announcement triggered a brief rally in the stock market last week because of hopes it would encourage residential real estate buying by foreigners. But details of the measures have not been revealed, and investors are uncertain whether they will have a major economic impact.

Bucking the downtrend, DXB Entertainments, which owns and operates theme parks in Dubai, rose 4.1 percent.

Abu Dhabi’s index ended 0.4 percent lower, weighed down by developer Aldar Properties, which fell 1.9 percent.

The Saudi index edged up 0.1 percent as travel company Al Tayyar rose 1.0 percent after saying it had repaid early, using its own resources, a 307 million riyal ($81.9 million) long-term loan that had been due to mature between 2019 and 2021.

Outside the Gulf, Egypt’s benchmark index dropped 1.4 percent, weighed down by property firm Talat Mostafa , down 6.3 percent and investment bank EFG Hermes , down 4.0 percent.

SAUDI ARABIA * The index gained 0.1 percent to 8,010 points. DUBAI * The index fell 0.5 percent to 2,909 points. ABU DHABI * The index fell 0.4 percent to 4,557 points. QATAR * The index fell 2.3 percent to 8,916 points. KUWAIT * The index lost 0.2 percent to 4,704 points. BAHRAIN * The index fell 0.2 percent to 1,261 points. OMAN * The index edged down 0.01 percent to 4,597 points. EGYPT * The index fell 1.4 percent to 16,760 points. (Reporting by Alexander Cornwell Additional reporting by Andrew Torchia Editing by Louise Ireland)

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