Saudi Arabia's banks are likely to extend gains on Sunday after further estimate-beating earnings, while a positive global backdrop should support sentiment across the region.
Saudi Hollandi Bank, the kingdom's fourth-largest listed bank, said on Saturday its fourth quarter net profit rose 35.6 percent compared to the same period last year to SAR313.4m (US$83.6m).
Five analysts polled by Reuters forecast the firm to post an average profit of SAR292m.
This follows Banque Saudi Fransi reporting a 22.2-percent jump in fourth quarter profit last week.
"The sector data for the banks has been pointing to strong loan growth for months but the concern was asset quality and non-performing loans, which seems to have abated," says Amer Khan, fund manager at Shuaa Asset Management.
Valuations from a historic perspective are still extremely attractive and there are signs of strong growth momentum for 2013, he adds.
The banking sector index jumped 1.3 percent on Saturday, helping boost the Saudi bourse to its highest close since September 15.
Shares in Saudi Arabian Fertilisers Company (SAFCO) posted a 10.3 percent decline in fourth-quarter net profits, missing analyst forecasts, due to lower urea prices, the firm said in a bourse statement on Saturday.
Saudi Arabia's Etihad Etisalat (Mobily) will be in focus after its board approved a recommendation for a 10 percent increase in capital through a bonus share issue.
Elsewhere, an improving economic outlook held world stock prices near a 20-month high, while the euro rose to its highest level since April against the dollar on Friday in the wake of encouraging remarks from the head of the European Central Bank.
Comments by ECB President Mario Draghi following the central bank's policy meeting on Thursday, suggesting Europe's economy is set for a recovery in 2013, have raised bets that global growth might gather momentum this year.