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Dubai stocks up 3pc; Gulf starts 2014 strongly

Dubai, January 2, 2014

Dubai's main stock index jumped 3 percent on Thursday to its highest close since October 2008 as major Middle Eastern bourses started 2014 on a strong note, buoyed by expectations for solid economic growth this year.

Flagship Dubai companies led their market up, with Emaar Properties surging 3.1 percent, lender Emirates NBD climbing 4.7 percent and Dubai Financial Market, the region's only listed stock exchange, rising 1.6 percent.

Property firms are expected to be among the main beneficiaries as Dubai begins investing this year to host the 2020 World Expo, while the United Arab Emirates' upgrade to emerging market status by major index compilers should attract more foreign money to its markets.

Dubai Islamic Bank shot up 11.9 percent, its largest one-day gain in at least two years. Last month it said it would increase its foreign ownership limit to help facilitate buying by large institutional investors from overseas.

Dubai Investments, a state-owned conglomerate, gained 2.8 percent after it predicted 2013 profit would come in about 150 percent higher than in 2012.

Other Gulf markets rose by more moderate amounts but they also continued last year's uptrends. Abu Dhabi and Qatar both rose 1.6 percent.

Abu Dhabi Commercial Bank, in jumping 6.2 percent on Thursday, hit a share price not seen since June 2006.

A Reuters survey of leading Middle East fund managers, published on the last day of 2013, found a third of them expecting to hike Middle East equity allocations in the next three months while none expected to reduce them.

SAUDI PETCHEMS

Saudi Arabia edged up only 0.2 percent on Thursday but it had already climbed 0.8 percent on Wednesday, when other markets were closed, to its highest level since September 2008.

Petrochemical shares were again actively traded on hopes for a strong global economy in 2014, though Saudi Basic Industries Corp, which had climbed 1.8 percent on Wednesday, retreated from major technical resistance on the April 2011 peak of 114.00 riyals; it closed down 0.2 percent at 113.25 riyals.

Any clean break of the resistance, in the form of two straight daily closes, would be long-term bullish, suggesting an end to the consolidation of the past four years. It would trigger a bullish right triangle formed by the highs and lows since 2010 and pointing in the long run up to the 150-riyal area, last seen in mid-2008.

Riyadh-based building materials firm Bawan Co fell back 9 percent to 63.50 riyals, dropping for the first time since it listed on Dec. 24 at an initial public offer price of 36 riyals.

Kuwait, weighed down by continued tensions between its cabinet and parliament which are hindering economic policy, rose only 0.1 percent. Its index is much less bullish technically than many Gulf markets, having dropped last month below its 200-day average.

Oman's stock market gained 0.3 percent. Financial Affairs Minister Darwish al-Balushi announced a 2014 budget which envisages spending growth of just 5 percent from the 2013 plan, a slowdown after three years of big rises.

But he did not give fresh details of the government's plans to revive its privatisation programme, saying that could affect the stock market. Investors are still awaiting a previously-announced offer of 19 percent of Oman Telecommunications Co that is expected to raise around $600 million.

Egypt's market gained 0.4 percent, with investors still focusing more on signs that aid from the Gulf will revive the economy than on the country's continued political uncertainty.

Arabia Investments, an investment firm which operates in fields such as power and building materials and could benefit from economic projects financed by the Gulf aid, jumped its 10 percent daily limit.

EFG Hermes, one of the largest investment banks in the Middle East, rose 1.4 percent after it appointed Khalid Ellaicy, former chief financial officer of Orascom Telecom, as its new CFO. EFG also said it had recently acquired a 65 percent stake in Credit Libanais as it seeks to expand into retail and commercial banking.

THURSDAY'S HIGHLIGHTS

DUBAI: The index surged 3 percent to 3,472 points.
ABU DHABI: The index gained 1.6 percent to 4,359 points.
QATAR: The index rose 1.6 percent to 10,545 points.
SAUDI ARABIA: The index gained 0.2 percent to 8,618 points.
KUWAIT: The index rose 0.1 percent to 7,550 points.
OMAN: The index gained 0.3 percent to 6,889 points.
EGYPT: The index climbed 0.4 percent to 6,811 points.
BAHRAIN: The index edged down 0.1 percent to 1,248 points.  - Reuters




Tags: growth | market | stock index |

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