Markets in Qatar and the UAE hit multi-month highs on Sunday as investors took positions ahead of dividend and fourth-quarter earnings announcements.
In Dubai, Emaar Properties was the main support, rising 2.6 percent. Builder Arabtec and courier Aramex climbed 2.1 and 1.5 percent respectively.
"If Q4 numbers are solid, expect the market to continue doing well compared to the rest of the region - we saw retail investors trigger the rally and institutional buying followed, which is healthy," said Amer Khan, fund manager, Shuaa Asset Management.
Institutions tend to trade more on company fundamentals and typically hold positions for longer than retail investors.
UAE companies will begin reporting fourth-quarter earnings in February, when dividends are also announced.
Mortgage lender Tamweel fell 4.2 percent to 1.14 dirhams, down for a second session.
Dubai Islamic Bank (DIB) said late Thursday its board approved plans to fully acquire the mortgage firm through a share swap - each Tamweel shareholder will be offered 10 DIB shares for every 18 Tamweel shares. After closing the offer, DIB will apply to the regulator to delist Tamweel from the Dubai Financial Market.
DIB shares dipped 1 percent to 2 dirhams.
"For Tamweel shareholders, (it's) not so good on the short-term as the book value is higher than the market value," said Nabil Al Rantisi, managing director at Menacorp in Abu Dhabi.
"For Tamweel as a company and the shareholders on the long run, it will be positive as they will have access to cheap funding - DIB is a bank that has lots of deposits."
Dubai's index rose 0.7 percent to its highest close since April 2012. It hit an intraday peak of 1,708 points and remains technically bullish after last week's break above October's high of 1,656 points, which is now a support level.
Abu Dhabi's benchmark climbed 0.9 percent to 2,710 points, its highest close since July 2011
Lenders led gains, with National Bank of Abu Dhabi and Abu Dhabi Commercial Bank climbing 3.4 and 1.9 percent respectively.
Elsewhere, Doha's index rose 0.8 percent to finish at its highest level since May 2012.
Industries Qatar climbed 2.8 percent, Qatar National Bank added 1.1 percent and Barwa Real Estate added 0.9 percent.
In Saudi Arabia, the bourse slipped from Saturday's 15-month high amid slight profit-taking.
The index slipped 0.1 percent, halting a three-day gain.
Investors are waiting for fourth-quarter earnings, which will begin to trickle in later this week.
Banks weighed with Samba Financial Group declining 0.7 percent, Banque Saudi Fransi down 0.3 percent and heavyweight Al Rajhi Bank eased 0.4 percent.
Banks shares posted flat growth in 2012, underperforming the main benchmark, which rose 6 percent. Lending growth failed to translate to profit as provisioning took its toll.
Analysts are expecting impairments to trail off in the fourth-quarter, which should help the sector and the overall market's performance.
NCB Capital said quarterly net income for stocks under its coverage are expected to rise 10 percent year-on-year.
"The key reason behind the expected increase is the 12.8 percent year-on-year increase expected in the banking sector's earnings to an estimated 6.7 billion riyals... due to strong growth in lending and lower provisioning," it said in a note.