UPDATE 6: Arabtec surges 11.6% to lead index higher, while Qatar hits 24-week high.
Arabtec surged, helping Dubai's index hit a three-month high as bullish investors backed Thursday's Dubai World's debt restructuring offer.
Arabtec climbed 11.6 percent. It is a trade creditor of Dubai World unit Nakheel.
"Arabtec was lagging too much compared with the market, especially Emaar, said Yousry Kassem, institutional equity sales trader at EFG-Hermes.
In the three weeks to Thursday's close Arabtec rose 11.5 percent, while Dubai's index added 16.4 percent over the same period.
Nakheel trade creditors will be offered a large-scale Islamic bond as part of the debt restructuring plan, a source close to the company said on Sunday.
On Saturday, Arabtec's chief executive Riad Kamal told Reuters the firm was owed money by Nakheel, but refused to say how much.
"I think the offer (from) Dubai World and the government of Dubai has been more than the expectations of the market," said Kamal. "It was quite a generous offer and creditors should consider the offer very carefully and I see no reason why they should not accept it and move on."
Dubai's index climbed 1.9 percent to 1,881 points, its highest finish since December 16.
National District Cooling Co (Tabreed) climbed 4.1 percent after it sold its 50 percent stake in its Jordanian subsidiary without disclosing the deal's financial terms.
Abu Dhabi property stocks surged, pushing the index to a four-month closing high as the feel-good factor from Dubai World's debt restructuring offer bolstered sentiment in the UAE capital.
Aldar Properties and Sorouh Real Estate added 8.3 and 5.4 percent respectively.
Abu Dhabi Commercial Bank, which is a major Dubai World creditor, rose 4 percent.
"We're waiting for more details (on Dubai World), but it seems like we now have a solution that most parties will be happy with," said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments. "The bluechip stocks are leading the market higher and will attract the most foreign flow."
The index rose 0.9 percent to 2,929 points, its highest finish since November 18.
Saudi Arabia's petrochemicals and telecoms stocks fell as investors booked profits from the index's 17-month high the day before.
Al-Rajhi Bank was the main support, climbing 0.9 percent, but Saudi Telecom Co (STC) and Etihad Etisalat (Mobily) each fell 0.4 percent.
On Saturday, STC hit a four-month high and Mobily reached a 23-month high, with investors buying in anticipation of strong first-quarter results and ahead of the launch of Saudi Arabia's first exchange-traded fund on Sunday.
"SABIC, Al Rajhi, Saudi Telecom and Mobily are the heavyweight stocks and are also likely to have a large weighting on the ETF, so they are seeing more volumes than normal - they are very well bid and are outperforming the market," said a Riyadh-based trader who asked not to be identified.
The index slipped 0.1 percent to 6,793 points. SABIC slipped 0.3 percent, giving up initial gains.
The Falcom 30, Saudi's inaugural ETF, was trading flat.
"People are expecting very good Q1 earnings from petrochemicals and telecoms and the run up ahead of results has been obvious," said the trader.
"A lot of people are now waiting for the market to come off so they can take up new positions or accumulate further - every time the market goes down 0.5 percent, there is a rally and the market is well bid."
Qatar's index reached a 24-week closing high as banks and services rose.
Qatar Gas Transport Co (Nakilat) climbed 1.3 percent, Al Khaliji Bank rose 1.7 percent and Doha Bank added 1 percent.
"The global economy is showing signs of improvement, so stocks exposed to world trade such as Industries Qatar (IQ) will benefit," saidKeith Edwards, head of asset management at Doha-based investment company The First Investor.
"The Qatar economy is going gangbusters so there should be a trickle down effect into banks, but in terms of the private sector I don't think there's much room for an appreciation in real estate stocks or domestic industrials."
IQ slipped 0.1 percent.
The index climbed 0.7 percent to 7,465 points.
"Qatar could reach a new 52-week high in the coming days," said Samer al-Jaouni, General Manager of Middle East Financial Brokerage Co.
Bahrain's measure fell 1.3 percent to 1,509 points.
Zain made its largest fall for more than a week, easing from Thursday's 28-week closing high after its chairman was quoted as saying its $9 billion asset sale to India's Bharti Airtel could take months to complete.
Zain fell 2.8 percent.
"The most important thing is that the deal is happening - the news it will take a while to complete is to be expected, but it probably affected sentiment among retail investors, institutions will be more understanding," said a Kuwait-based analyst who asked not to be identified.
"There's increasing talk in the market about what the terms of a special Zain dividend will be and this will be an ongoing catalyst."
Fellow Kharafi-linked firm National Investment Co dropped 4.4 percent.
The index fell 0.3 percent to 7,469 points. (Reuters)