Abu Dhabi banks rally, Gulf tracks global gains

Bank shares led gains in Abu Dhabi on Thursday as investor fears over the health of the financial sector were soothed by earnings they deemed passable and as most Gulf Arab markets tracked a rally in global stocks.

Qatar QSI posted the strongest shares in the region, rallying more than two percent, while Oman's benchmark MSI gained nearly one percent. Dubai shares DFM rose 0.5 percent.

National Bank of Abu Dhabi rallied 5.98 percent, a day after it posted a 12 percent decline in first-quarter net profit, beating analysts' forecasts.

"The results have not been that impressive but they have also not been really bad," said Sherif Abdelkhalek, institutional trading manager at Beltone Financial.

"What is important until now is that most of the banks have not posted worse first-quarter results than in the fourth quarter ... This will give a bit of confidence to retail investors."

The Abu Dhabi main index <.ADI> ended up 1.17 percent.

In Dubai, Emirates NBD rose 0.74 percent, having posted a 5.3-percent rise in first-quarter profit on Wednesday.

"Some of the UAE results so far haven't been great but that was priced in already and results haven't been bad enough to send us cascading lower," Matthew Wakeman, director of cash and equity linked trading at EFG-Hermes said in a market report. In Qatar, hopes of more state support for firms hit by the global financial crisis helped shares extend gains into a second day.

"It's partly that confidence is from the government saying it might help other sectors, not just the banks," said Samer al-Jaouni, general manager of Middle East Financial Brokerage Co.

Qatar's prime minister was quoted earlier this week as saying the state was willing to pump cash into firms needing help during the downturn, after stepping in to support banks.

"The global rally is also affecting the market, especially the institutions. There is new liquidity coming to the market from foreign investors," Jaouni said.

Highlight's of Thursday's trade:

Abu Dhabi:

* The index ADI ended up 1.17 percent at 2,526 points.

* Shares in Sorouh Real Estate, which on Wednesday said its first-quarter net profit declined by more than half compared to the same period last year because of a decline in land sales, rallied 4.96 percent.

Qatar:

* The Doha index QSI ended 2.33 percent higher at 5,603 points.

* Industries Qatar and Qatar Gas Transport Co gained 3.04 percent and 2.86 percent higher respectively.

Dubai:

* The benchmark DFM ended up 0.5 percent at 1,605 points, led higher by Dubai Investment Co, which gained 7.46 percent.

* Shares in telecoms firm du <DU.DU> rose 2.78 percent, a day after the company swung to a net profit in the first quarter from a loss last year.

Kuwait:

* The benchmark KWSE ended up 0.11 percent at 7,556 points.

* "There are expectations that investment companies will do well this and next quarter," said Jassem Al Zeraei, head of institutional sales at National Bank of Kuwait Capital.

"They think the companies have taken all the losses they can from last year, so a lot of people are betting on that."

Kuwait's investment companies have been especially hard hit in the global financial crisis, with many struggling to secure fresh loans or are having to sell assets.

Oman:

* The Muscat index MSI closed 0.85 percent higher at 5,128 points, extending gains into a second day.

* Heavyweight Bank Muscat rose 2.08 percent. Oman Cable Industries Co gained 7.15 percent.

Bahrain

* Bahrain's main index BAX bucked the rising trend, edging down 0.06 percent to 1,596 points. (Reuters)

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