MidEast Shares Mixed

Middle East stocks were mixed, with Qatar sinking to a 5-year low amid fund selling before earnings season as investors worry Q3 results will be hit by a diplomatic roadblock between Qatar and its neighboring countries.

Arab states broke off ties with Qatar on June 5, partly on the belief Qatar is friendly towards terrorists.

Banks are suspected to be the hardest hit by the diplomatic strains as neighboring states have pulled out their deposits. On Wednesday Qatar’s central bank governor told local media a withdrawal of deposits by neighboring countries had not hurt the banking sector and the government had enough money to protect banks. But he also said the government could only be a funding source of last resort, Reuters reported.

In Egypt, lenders and banks were under pressure after the central bank there said it would raise the required reserve ratio to 14% from the current 10% on Oct. 10.

In company news, Mediterranean and Gulf Cooperative Insurance said the central bank warned the company to improve its capital adequacy ratio by Dec. 31 or be suspended from issuing new insurance policies.

Saudi Arabia’s main index added 0.6% to 7,286 points, Dubai rose 0.8% to 3,599 points, Abu Dhabi slipped 0.2% to 4,434 points, Qatar slumped 1.6% to 8,153 points, Egypt eased 0.4% to 13,882 points, Kuwait firmed 0.4% to 6,693 points, Bahrain shed 0.3% to 1,274 points and Oman dropped 0.3% to 5,208 points.

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