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Tue 12 Jan 2010 10:33 AM

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Dubai market slips as Arabtec selling resumes

UPDATE 6: Late selling in Emaar, Arabtec drags Dubai to biggest one-day loss for a week.

Late selling in Emaar Properties dragged Dubai's index to its largest one-day loss for a week, while Arabtec extended its decline since agreeing a stake sale.

Emaar dropped 4.4 percent to a three-week closing low.

"Whenever we see a sell-off in one of the major bluechips there's usually a sell-off across the board and so continued selling in Arabtec caused weakness in the whole market," said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments.

Arabtec extended its slump, falling 5 percent to take its losses to 15 percent since saying it would sell a 70 percent stake to Aabar Investments in a deal that will dilute existing holdings.

"Investors are bearish in the short-term for Arabtec because of the dilution effect, but there is value for medium- to long-term, so investors want to sell at current levels and then buy back once the dilution has taken place," added Shurrab.

Emaar and Arabtec accounted for more than half of all shares changing hands on the index and sparked selling in other names, with losers outnumbering gainers 19 to 1. The benchmark fell 2.4 percent to 1,759 points.

Banks and property stocks weighed on Abu Dhabi's index, which declined for a second day.

National Bank of Abu Dhabi dropped 2 percent, Abu Dhabi Commercial Bank fell 4.4 percent and Aldar Properties lost 5 percent. Aabar slipped 2 percent.

The index dropped 0.6 percent to 2,758 points.

Kingdom Holding surged to an eight-month high after its main shareholder, billionaire Prince Alwaleed bin Talal, gave a bullish outlook, but Saudi Arabia's index ended lower for a third day as banks stocks weighed.

Kingdom rose 9.8 percent after Alwaleed told Reuters he expects troubled US lender Citigroup will book a profit this year and next. Alwaleed is a top shareholder in Citi.

Al-Jazira Bank dropped 3.7 percent to a nine-month closing low after the lender's fourth-quarter losses widened, while Saudi Hollandi Bank and Banque Saudi Fransi both declined for a second day since reporting below-forecast earnings.

The index fell 0.4 percent to 6,266 points.

The Saudi banking index rose 15 percent last year, lagging the petrochemicals index, which surged 65 percent over the same period.

Kuwait's index fell for a second day, tracking losses on Gulf Arab markets as bluechips declined amid souring regional sentiment following worse-than-expected earnings from Saudi Arabia's banks.

Kuwait's lenders struggled, with Kuwait Finance House dropping 3.5 percent, National Bank of Kuwait losing 1.8 percent and Commercial Bank of Kuwait sliding 2.1 percent.

Agility fell 3.1 percent as investors booked gains from a five-session, 14-percent rally. The index slipped 0.3 percent to 7,025 points.

Bahrain's measure bucked the regional negative trend to rise 0.8 percent to 1,475 points.

Qatar's index slumped to its biggest one-day decline for five weeks as investors dumped merger targets Barwa Real Estate and Qatar Real Estate (Alaqaria) and most other stocks also retreated.

Barwa dropped 5.8 percent to a five-month low and Alaqaria fell 4.9 percent. The latter jumped 18 percent in the two sessions following Sunday's announcement that the two firms had agreed terms for their merger.

Industries Qatar dropped 1.6 percent and Qatar National Bank slid 1 percent. The latter's board will meet after market hours ahead of the likely release of its quarterly earnings.

The index fell 1.4 percent to 6,910 points, its largest fall since December 9.

Banks helped Oman's index extend its winning run to hit a fresh 11-week high, but volumes fell to a 12-day low as investor caution grew following disappointing earnings from Saudi Arabia.

Bank Muscat added 0.2 percent, Bank Dhofar rose 2.1 percent and National Bank of Oman climbed 0.6 percent, although all these gains were on slight volumes, with the bulk of trading directed at small-cap names, a sign of diminishing institutional activity.

Oman's index edged up 0.1 percent to 6,610 points, its highest finish since late October.

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