STOCKS NEWS MIDEAST-Qatar leadership transition seen as positive

0530 GMT - News of Qatar's leadership transition is seen as modestly positive for its stock market, signalling political stability and a continuation of current economic policies.

Late on Sunday the Qatari-owed al Jazeera television channel said the emir, Sheikh Hamad bin Khalifa al-Thani, 61, would meet ruling family members and decision makers on Monday "amid reports that he intends to hand over power to his crown prince, Sheikh Tamim".

The news was not unexpected; the government has prepared the public and diplomatic allies for the transition, which diplomats said could include the departure of the powerful prime minister and foreign minister, Sheikh Hamad bin Jassim al-Thani, 53.

"The handover is positive in the sense that it will be well managed," says Sebastien Henin, portfolio manager at The National Investor in Abu Dhabi. "For the crown prince, there is a clear path to manage the country with no competition."

It is possible that the government could announce positive economic news or more benefits for local citizens to mark the transition. In any case, significant change in Qatar's economic direction does not appear to be on the cards.

"Tamim has controlled key policies in Qatar for some time, and shares his father's views on political development in Qatar and economic diversification," Eman Ebed Alkadi of Eurasia Group consultants Alkadi wrote.

National budgets have been agreed up until 2016-2017, Alkadi wrote, and with preparations for the World Cup in 2022 in full swing, much change in domestic momentum is unlikely.

Qatar's bourse, up 10.4 percent so far this year, benefited from news early this month that MSCI was upgrading it to emerging market status. In the last week it has been hit by the uncertain global environment, but it ended Sunday well off its lows, suggesting bargain-hunting support.

In the United Arab Emirates, Dubai builder Arabtec , part-owned by Abu Dhabi state fund Aabar, has extended the subscription period for its $650 million rights share issue to July 4 from June 23.

Arabtec said it wanted to give investors outside the UAE a chance to participate; a source familiar with the matter told Reuters that the entire amount had not been taken up by shareholders at the original deadline. However, many traders expect Arabtec to succeed eventually in selling the issue, given its strong backers, so the stock may have little downside.

In Saudi Arabia, the government announced it is switching its official weekend to Fridays and Saturdays, bringing the kingdom's working week closer in line with other countries.

Although there may be little immediate economic benefit, the stock market may be boosted by the decision as it had been requested by the business community and indicates the government's willingness to reform the economy.

The global backdrop for markets is negative, however; Asian shares fell to a fresh 9-1/2-month low on Monday as investors worried about China's economic and financial stability.

Local investors may continue to sell in Egypt, where the army stepped into a deepening political crisis on Sunday, demanding that the Islamist government and its opponents settle their differences and warning that it would act to stop violence spinning out of control.

However, foreign investors have been net buyers in the last several days, according to exchange data, which suggests they believe the market may be near a bottom and are looking for a rally if protest rallies planned for June 30 pass without major violence. (Reporting by Nadia Saleem; Editing by Andrew Torchia)

Source: http://news.yahoo.com/stocks-news-mideast-qatar-leadership-transition-seen-positive-055834551.html

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