UAE shares extend gains as world stocks rise

STOCK WATCH: Kuwait's ruler dissolved parliament on Wednesday, leading Moody's Investors Service to say it could downgrade Kuwait's sovereign rating.(Getty Images)

UAE shares extended gains as investors took cues from a climb in world shares following the US Federal Reserve's announcement it would start large-scale buying of government debt.

"In general all Gulf markets should react to this news," said Haissam Arabi, chief executive and fund manager of Gulfmena Alternative Investments, a regional specialist hedge fund company.

Dubai's index DFM rose for a second day, adding 1.64 percent to 1,532 points. Abu Dhabi's measure ADI climbed for a third day by 1.17 percent to 2,395 points.

Banking and real estate shares paced the gains in both markets, with Emirates NBD having the most influence on the Dubai market with its 2.61 percent increase.

Abu Dhabi's Arkan Building Materials Co jumped over nine percent and Abu Dhabi Commercial Bank 3.55 percent after the lender said it intended to convert $1.8bn of state deposits into regulatory capital.

Qatar's main index QSI closed lower after four days of gains, led by banks, while Bahraini shares rose.

The measure, which rose 8.1 percent in the last four trading days, fell 0.79 percent to 4,758 points.

Qatar National Bank, which advanced 28.75 percent this month, fell 1.38 percent, while Commercial Bank of Qatar shed 1.48 percent after gaining more than 15 percent this month.

In Bahrain, the index BAX gained 0.99 percent to 1,587 points. Ahli United Bank climbed 5.33 percent.

Kuwaiti shares ended higher for the fifth time in six trading days as investors expect the dissolution of the Gulf state's parliament would help a temporary government push through a $5bn economic rescue package more smoothly.

Kuwait's ruler dissolved parliament on Wednesday, leading Moody's Investors Service to say it could downgrade Kuwait's sovereign rating.

But investors said the move could enable Kuwait to pass a rescue package, including guarantees on bank loans, needed to stimulate the economy, while avoiding the bickering between cabinet and parliament that often stalls decision-making.

"The government will be more likely to approve the rules and major projects because there are no conflicts with parliament," said Ammar Hajeyah, assistant manager for asset management, local and Gulf investments, at Global Investment House.

"Today, we are seeing speculation on this subject," he said.

The benchmark KWSE ended 0.88 percent higher at 6,683 points.

Oman's main index MSI closed higher for a second trading day as foreign and local institutional investors snapped up blue chip shares due to stability in global markets and a perception that Oman's index has bottomed out.

The measure MSI climbed 2.39 percent to 4,772 points. Bank Muscat and Oman Telecommunications Co advanced 8.1 percent and 3.07 percent, respectively.

"We are seeing some reverse in the direction from foreign flows. There is some movement by foreign institutions on Bank Muscat and Omantel," said Adel Nasr, local brokerage manager at United Securities.

Nasr said some 30 percent of buying on Wednesday was from foreign investors.

"There is some stability," he says. "Investors now know that the market has reached a bottom and Oman oil prices have increased to $47 a barrel, which is two dollars above the government's budget oil price." (Reuters)

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