* Omantel falls after revealing $846 million Zain purchase

* Abu Dhabi’s TAQA falls despite swinging to profit

* Saudi builder Khodari surges in unusually heavy trade

* Banks weigh on Qatar

* Analyst says Egypt inflation may fall sharply at year-end

By Andrew Torchia

DUBAI, Aug 10 (Reuters) – Gulf stock indexes moved sideways
on Thursday, continuing a two-week-old trend, but Kuwaiti
telecommunications firm Zain surged in response to an investment
by Omantel. Egypt’s bourse dropped after data showed a fresh
rise in inflation to above 30 percent.

Kuwait’s index rose 0.3 percent as Zain
gained 4.4 percent to 0.471 dinar in its heaviest trade since
March after agreeing to sell 425.7 million treasury shares,
equivalent to 9.84 percent of the firm, to Omantel for $846
million or 0.60 dinar per share. The stock came well off the
day’s high of 0.505 dinar.

The purchase, subject to regulatory approval, was announced
days before Oman is to shortlist qualified applicants for a
third mobile licence, for which Zain has bid. Omantel,
which is making the investment to diversify beyond its small
home market and has been trading near multi-year lows, fell 1.3
percent in its heaviest trade since November.

Dubai’s index edged up 0.1 percent as Shuaa Capital
, which has been trending down for the past couple of
weeks, rebounded 2.5 percent.

Abu Dhabi’s index edged down 0.1 percent as Abu Dhabi
National Energy Co (TAQA) dropped 2.0 percent after
reporting a small profit in the three months to June, swinging
from a year-earlier loss.

The Saudi Arabian index edged up 0.2 percent as Al
Rajhi bank gained 0.8 percent. Construction firm
Khodari surged 6.8 percent in unusually heavy trade.

Saudi Printing and Packaging climbed 3.0 percent
to 23.06 riyals in its heaviest trade since May 2016 after
rising on Wednesday above technical resistance on its December
peak of 21.85 riyals.

Arabian Cement edged down 0.2 percent after
reporting that second-quarter net profit plunged to 35.5 million
riyals ($9.5 million) from 141 million riyals a year ago,
missing the 71.7 million riyal average forecast of analysts.

Qatar’s index dropped 0.7 percent because of weak
banks; the biggest, Qatar National Bank, lost 0.7
percent.

In Egypt, the index dropped 0.9 percent in a
broad-based decline after official data showed annualised urban
consumer price inflation jumped in July to 33.0 percent, the
second highest rate on record, from 29.8 percent in June
following fuel price hikes.

However, London-based Capital Economics said one-off boosts
to inflation such as the fuel price rises had now peaked so
inflation should fall back in coming months to below 20 percent
around the end of this year, allowing monetary policy to be
eased.

HIGHLIGHTS

SAUDI ARABIA

* The index rose 0.2 percent to 7,165 points.

DUBAI

* The index edged up 0.1 percent to 3,647 points.

ABU DHABI

* The index edged down 0.1 percent to 4,551 points.

QATAR

* The index lost 0.7 percent to 9,243 points.

EGYPT

* The index dropped 0.9 percent to 13,462 points.

KUWAIT

* The index rose 0.3 percent to 6,845 points.

BAHRAIN

* The index edged up 0.1 percent to 1,324 points.

OMAN

* The index edged down 0.1 percent to 4,992 points.
(Reporting by Andrew Torchia; Editing by Andrew Bolton)

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