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Tue 21 Sep 2010 10:47 AM

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Bank and telecoms lift Saudi to 3-month high

Saudi's main benchmark rises 0.3 percent to 6,435 points, its highest finish since June 21.

Bank and telecoms lift Saudi to 3-month high
MARKETS WATCH: Saudis main benchmark rises 0.3 percent to 6,435 points, its highest finish since June 21. (Getty Images)

Banks and telecoms helped Saudi Arabia's index TASI reach a three-month closing high as steady global markets boosted local sentiment.

Al Rajhi Bank climbed 0.6 percent and Samba Financial Group added 1.2 percent.

Telecoms provider Etihad Etisalat (Mobily) rose 2.3 percent. The sector enjoyed one of its most profitable periods over Ramadan and Eid-al-Fitr, which ended in September and the telecoms index was up 6 percent since Aug. 25.

Saudi's main benchmark rose 0.3 percent to 6,435 points, its highest finish since June 21, and recent gains have been helped by increased confidence that the US will not slip back into recession, said Youssef Kassantini, an independent financial analyst.

"This really helped the stock market break resistance at 6,340 that was the 200-day weighted moving average," said Kassantini.

"Today the market is trying to stabilise after yesterday's strong performance. The volumes are still increasing. The only catalyst in the Saudi market is the Q3 results that are expected soon."

World stocks ticked upwards and the dollar fell broadly on Tuesday as investors braced for a Federal Reserve meeting that may discuss whether the fragile US economy needs a fresh infusion of cash.

Property-related stocks dominated trade as Dubai's index DFM ended higher for an 11th session in 12 to reach a new 18-week peak.

Builder Arabtec climbed 1.6 percent, Emaar Properties added 0.5 percent and Union Properties rose 1.5 percent.

Property stocks were typically the most volatile on markets in UAE and so tended to overshoot on the way up and down, attracting speculators.

This trio accounted for nearly half of all shares traded on the index, which climbed 0.6 percent to 1,701 points, its highest finish since May 18.

"In the UAE there are probably some investors who are just putting money on the big names based on the FTSE announcement, but we have to see several types of money coming through into the market," said Haissam Arabi, chief executive and fund manager at Gulfmena Aternative Investments, adding stocks were likely to soon correct before rallying again from mid-October.

On Thursday, the FTSE group said it had upgraded the UAE to emerging market status.

Aramex surged 6 percent to reach a new 26-month high.

Abu Dhabi's benchmark ADI climbed 0.2 percent to 2,638 points as property stocks tracked Dubai gains.

Aldar Properties rose 3.3 percent and Sorouh Real Estate added 2.9 percent.

Zain fell and banks were mixed as Kuwait's index KWSE ended flat, while Qatar's benchmark QSI reached a 21-week closing high.

Zain dropped 1.5 percent, declining for a second day in three since Thursday's four-month peak.

"Zain is weakening - rumours remains that the Kharafi group is looking to sell a stake, but these stories ebb and flow as investors get their hopes up," said a Kuwait trader who asked not to be identified.

In August, an industry source told Reuters Zain had signed a non-disclosure agreement with Abu Dhabi-listed Emirates Telecommunications Corp (Etisalat) to study its Kuwaiti rival's assets. Talk persists that major Zain shareholder the Kharafi is trying to sell a stake in the operator.

Kuwait Finance House fell 1.8 percent and Commercial Bank of Kuwait dropped 2.2 percent, but Burgan Bank added 1.1 percent.

The index ended flat at 6,821 points.

"Bank third-quarter results might surprise to the upside, but bank stocks gave risen so much I doubt earnings will have much impact. I'm not expecting any major surprises in other sectors," said the trader.

The bank index fell 0.7 percent, falling for a second day in three since Thursday's 21-month peak.

Qatar's benchmark QSI rose 0.5 percent to 7,638 points, its highest finish April 26.

Commercial Bank of Qatar and Industries Qatar climbed 1.3 and 0.9 percent respectively.

Oman's Galfar Engineering  surged to a 20-week high after saying it won a 35.3 million rials contract from the government, limiting losses Oman's index MSI.

Galfar climbed 6.5 percent to 0.495 rials, its highest level since May 5.

"The stock already touched our target level at 0.47 rials," said Gunjan Gupta, head of research at Oman Arab Bank.

"The index is getting support from Bank Dhofar, Renaissance Services and Voltamp Energy Co."

Bank Dhofar ended flat, but Renaissance and Voltamp climbed 2.4 and 2.8 percent respectively.

The index slipped 0.02 percent to 6,419 points, its first decline in six sessions. (Reuters)

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