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Wed 18 May 2011 10:53 AM

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Dubai up for second day as property stocks gain

Tamweel surges to its highest close since resuming trade following a 30-month hiatus

Dubai up for second day as property stocks gain
STOCK WATCH: Property stocks lifted Dubais bourse and mortgage lender Tamweel surged to its highest close since resuming trade following a 30-month hiatus (Getty Images)

Property stocks lifted Dubai's bourse and mortgage lender Tamweel surged to its highest close since resuming trade following a 30-month hiatus.

Tamweel climbed 8.3 percent. Most shareholders who were stuck with the stock during its suspension have now sold to alternative investors, said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments.

"The company returned to profitability, its financial situation is not troubling at the moment and it has the support of the government," Shurrab said.

Dubai's index DFM ended 0.7 percent higher at 1,590 points, rising for a second day since Monday's five-week low.

Volumes are concentrated in property stocks. Emaar Properties and Union Properties gained 1.3 and 4.6 percent respectively. Elsewhere, Abu Dhabi's index ADI rose 0.3 percent to 2,660 points.

Heavyweight Etisalat climbed 0.5 percent and Sorouh Real Estate rose 1.5 percent.

In a ninth straight loss, Oman's index MSI fell to a 17-month low, with most stocks down due to muted buying interest.

Bellwether Bank Muscat fell 2.1 percent and Bank Dhofar dropped 3.9 percent.

The benchmark fell 1.4 percent to 6,033 points, its lowest close since December 10, 2009.

"We expect to face a strong support at 5,965 points - this level depends on the movement of the index within the next week," says Osama Ibrahim Al Qinna, head of brokerage at Oman Arab Bank.

Yet the market will find it difficult to stay above 6,000 point, he added.

All but three active stocks on the index declined.

Saudi Arabia's index TASI rose for a second day after the kingdom's finance minister said the budget will be overspent by 15 percent in 2011 due to increased spending on construction and job-creation measures.

Worried by unrest sweeping the Arab world, the world's top oil exporter has pledged to spend an estimated $130bn, or around 30 percent of its annual economic output, on new houses, creating jobs, unemployment benefits and other measures.

"The government will probably end up spending more than what they said," said John Sfakianakis, chief economist at Banque Saudi Fransi in Riyadh.

The announcement is boosting expectations for corporate results, he added.

The building and construction index rose 0.7 percent and the main benchmark gained 0.5 percent to 6,686 points.

Volumes are concentrated in small and mid-cap stocks, with Tabuk Agriculture surging 10 percent and Food Products up 2.8 percent.

Traders are betting increased state spending will lift consumer consumption to the benefit of the food and agriculture sector, Sfakianakis said.

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