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Mon 16 Apr 2007 03:39 PM

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Gulf market report - 16 April 2007

DFM recovers - but experts say this does nothing to reverse the market's downward trend.

Good news: the Dubai Financial Market index today closed up 0.27% at 3,795.78. But for many, celebrating this fact would be far too premature as many are still reeling from the downward trend in the market.

"Yes, the market rebounded after yesterday's drop," noted Sheriff Abdelkhalek, dealing room manager for Al Futtaim HC Securities.

"Until three months ago the DFM average volume was around 500 million. This is nothing in comparison to the average volume in 2006 were it stood around 2 billion and sometimes reached the 4 billion mark. Since 2006 there has been a downward trend. Yes, the index has gone up and down, but if you are looking at the bigger picture, it still shows there's a downward trend," Mr Abdelkhalek said.

Despite the pessimistic outlook today, some companies will certainly feel like celebrating - the Dubai Financial Market company being one of them.

Shares in the exchange - which are listed on the DFM itself - rose 3.90% to close at AED2.40.

This was followed by Union Properties (UPP) which went up 3.17% to AED3.25.

Third was Dubai Islamic Bank (DIB) which saw it price go up 1.29% to AED7.09.

Maybe a small victory to some, but overall, a total of 9 companies went up on the DFM while 8 went down and 2 remained unchanged.

However, today only saw 148 million shares change hands, supporting Mr Adbelkhalek's view that a downward trend is set to continue.

Dubai National Insurance and Reinsurance (DNIR), National Cement (NCC), and Amlak were today's top three losers, falling 4.92%, 4.67% and 1.74% respectively.

The Abu Dhabi Securities Market (ADSM) reported a loss for the second session running. The general index closed down 0.48% at 3,013.68.

However the banking and finance sector outdid the general index, having risen 0.19% to 4,457.95. But winners were few: losers outdone gainers 6:4 on the ADSM.

Bahrain's index closed higher for the second time in three trading days, paced by Ahli United Bank. The index rose 0.1% to 2,126.74 points. Ahli United Bank gained 2.02%. Bahrain's index has fallen 4.19% this year to Sunday.

Qatar's index closed higher for the seventh time in eight trading days, paced by Industries Qatar. The index gains 0.69% to 6,215 points. Industries Qatar climbed 0.48% after it posted a 23% rise in first-quarter profit on Sunday.

"The market was surprised by a very decent first quarter from Industries Qatar," said Parvez Khan, head of investments at Commercial Bank of Qatar.

"This is very positive for the company." Qatar's index has fallen 13.46% this year to Sunday, making it the Gulf's worst performer.

Kuwait's index rose to its highest close in more than six months, paced by Mobile Telecommunication Co. The index gained 0.49% to 10,469.70 points. MTC gains 1.23% after the company said on Sunday it was still considering a London float for its international unit in 2008. Money from the IPO would boost the company's valuation, says Waleed al-Braikan, analyst at Gulf Investment Corp. in Kuwait.

Oman's main stock index rises to its highest close in more than six weeks, paced by Raysut Cement Co. and Oman Telecommunications Co. The index gains 1.14% to 5,748.46 points, its highest since March 1. Raysut climbs 4.1% and Omantel 4.47%. The former posted a 43.9% surge in first-quarter profit to

7.32 million rials on Monday, beating analyst expectations

"We are expecting Raysut's net profit to exceed 30 million rials this year, more than 50% higher than last year because of higher production and rising cement prices in Oman," says Adel Nasr, a broker at United Securities.

Omantel is trading at 10 times 2006 earnings, making it attractive compared to Gulf peers, he says.

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