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Foreign funds are flowing into the United Arab Emirates and Qatar as those markets prepare to be upgraded by global equity index compilers this year – but so far only a few top blue chips are benefiting much, a Reuters study of trading data shows.At the end of May, MSCI will raise the UAE and Qatar to emerging from frontier market status. Passive funds, which directly track MSCI and S&P Dow Jones indexes, are expected to buy the stocks that are included in the revised emerging market indexes, in the same weightings.EFG Hermes expects even smaller gross MSCI-related passive inflows of about $270 million into the UAE and $220 million into Qatar – and they would be partly offset by outflows of some $100 million each from passive funds tracking MSCI's frontier index.Active fund inflows are harder to project, but VTB Capital estimates Qatar may attract as much as $2.6 billion of such money as a result of the MSCI upgrade, with the UAE drawing up to $2.3 billion.Doha Bank, Commercial Bank of Qatar and Qatar Electricity and Water Co. drew between $60 million and $80 million each.
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