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Thu 25 Aug 2011 10:07 AM

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Global sentiment lifts UAE, Qatar banks rise

Investors positive US Fed will announce measures on Friday to help faltering economy

Global sentiment lifts UAE, Qatar banks rise
Qatar and UAEs bourses ended higher ahead of the weekend (Getty Images)

Qatar and UAE's bourses ended higher ahead of the weekend,
with investors optimistic that the United States Federal Reserve Chairman will
announce measures on Friday to help the faltering economy.

World stocks, measured by the MSCI world equity index rose
0.3 percent. Investors took an optimistic view of how clearly the Federal
Reserve will commit to supporting the economy at a gathering this week.

"There is a positive sentiment prevailing in global
markets prior to meeting- with high expectation of some drastic measures,"
said Rami Sidani, Schroders Middle East head of investment.

"We're seeing a rally in global financial markets over
the past four days. This is being reflected in our markets so there's some
positive sentiment as a spillover."

Dubai's retail-driven stocks rose, with Emaar Properties
rising 0.7 percent, Dubai Financial Market gaining 2.7 percent and Arabtec up
1.5 percent.

The benchmark index ended 0.5 percent higher at 1,465
points, cutting short two-days of losses.

DP World gave back early session gains spurred by upbeat
first-half results and ends 1.9 percent lower. It's profit increased by
four-fold to $705m compared with $177m in the same period in 2010.

Abu Dhabi banks helped lift the index to its fourth-straight
gain. It ended 0.3 percent higher at 2,590 points.

National Bank of Abu Dhabi rose 0.5 percent, First Gulf Bank
gained 1.6 percent and Abu Dhabi Commercial Bank climbed 0.3 percent.

Elsewhere, Qatar's index climbed 0.8 percent to end at 8,171
points, up in three of last seven sessions.

"Market is trading on 8,050 points, which is a major support
and breaking it down will be very risky and mean market reversal," said
Omnia Ashawmy, head of research at Qatar Securities. "Use any rebound near
8,250-8,350 levels as a selling opportunity."

Industries Qatar was the strongest support for the index,
rising 0.5 percent. Commercial Bank of Qatar jumped 3 percent and financial
firm Masraf Al Rayan gained 1.4 percent.

Qatari banks are seen strong due to their insular nature
that protects them from volatility in global markets. It is also the main
beneficiary of government spending in the country.

Renewed buying from local pension funds and foreign traders
in Oman's bluechips helped lift the index for a second day and volumes hit a
peak of 19-months.

Renaissance Services surged 9.3 percent, accounting for the
highest trading volumes. The stock plummeted to a 2009-low last week after the
oil services firm discovered financial fraud at unit Topaz and reported a
77-percent drop in first-half net profit.

Investors shifted focus on company fundamentals and bought battered
stocks on cheap valuations. The benchmark index slumped to its lowest level in
two-years on August 11 amid a regional downtrend on fears the global economy is
retreating into a recession.

"There is a strong come-back from local pension funds
and also foreigners," said Adel Nasr, United Securities brokerage manager.
"Lots of asset managers are accumulating [stocks] after the drop we had
last week. The upward trend was accelerated by global markets' sentiment.

"If you rule out Renaissance, Q2 was all good results -
now we are seeing this reflected in the market."

Heavyweight Bank Muscat gained 0.6 percent and telecoms
operator Nawras rose 1.6 percent. Small-cap stocks also see sharp gains.

The benchmark rose 1.2 percent to close at 5,585 points,
with trading volumes the highest since April 14.

Elsewhere, Kuwait's benchmark traded 0.2 percent lower at
5,774 points, with Aviation Lease and Finance Co the main drag. The stock fell
1.6 percent, accounting for the highest volumes and turnover.

"Kuwait is reaching new lows everyday-it has two
issues," said Sebastien Henin, Abu Dhabi-based portfolio manager at The
National Investor. "First is the political concerns and the country is
late in deploying its development plan. Also valuations are the most expensive
in the region."

The benchmark traded close to Tuesday's seven-year low.

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