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Sun 22 Apr 2007 03:43 PM

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Gulf market report - 22 April 2007

Cheap share prices on the DFM contributed to the index closing up, say experts.

When goods are sold on the cheap they are likely to go flying off the shelves. The same could be said of shares on the Dubai Financial Markets, which still saw high trading volumes, while the DFMG index closed up 1.02% to 3,904.13 at the end of today's session.

"It's the same story on the DFM. When you look at the share prices from the stock markets in the other GCC countries, they are a lot more expensive," said Majdadden Issa, a broker for Atlas Financial Services.

"Last week there was a 20% increase in foreign investors. This, I believe is mainly due to the cheap shares in the market," added Issa. However, Issa expressed bewilderment at the high trading volumes in DFM shares

"I don't know what is going on at the moment on the DFM. Again it is trading almost 50% of the market. It will be interesting to see how long this will continue," said Issa.

The usual slow start to the week could go some way in explaining why volumes did not reach the same heady heights as last week's session. Today only 691 million shares traded hands, at a value of AED2.156 billion.

As Issa pointed out, DFM's share price did rise significantly - going up 3.32% to AED3.11. But today, it was ousted from the top three gainers lists by the likes of: Tabreed, Arig and Aman, which rose 8.42%, 7.41% and 4.67% respectively.

GulfNav and EBI were today's only two losers. GulfNav lost 0.88% to close at AED1.13 while EBI went down 0.70% to AED8.50.

"Only two weeks ago, GulfNav was trading at AED1. Last week it went up to AED1.22 and today it's gone down AED1.13. Even at AED1.22, I still thought it was an extremely low price for a company of this magnitude. Dubai is very cheap at the moment," said Issa.

Meanwhile Dubai's counterpart, the Abu Dhabi Securities Market, did not fare so well. The general index fell 0.04% to 3,090.35. The banks and financial services sector also reported a loss, falling 0.07% to 4,439.28. It appears it was a grim day in Abu Dhabi, as losers outnumbered winners by 7:3.

Bahrain's index closed higher for the first time in four days, paced by Ithmaar Bank. The index rose 0.17% to 2,112.76 points, with Ithmaar climbing 4.17%. The index fell 4.89% to Thursday's close, the Gulf's fourth-worst performer.

Shares of Qatar National Bank today posted their sharpest single-day gain in over two years, lifting the index. Shares in the lender surged 8.19% leading gains in the banking sector. Qatar National Bank posted record quarterly profit for the first three months of the year.

"All eyes were on the banking sector and the results were strong," said Rami Sidani, senior associate for asset management at Shuaa Capital.

"First-quarter earnings were up around 33% compared to the fourth quarter of 2006. That's a strong sign of recovery." Qatar's index closed higher for the fourth day in five, rising 0.97% to 6,316.31 points. However, this year to Thursday's close, Qatar's index had fallen 12.30%, the Gulf's worst performer.

Kuwait's main stock index closed up for an eighth trading day to its highest level in more than a year. The index gained 0.2% to 10,658.40 points. Mobile Telecommunications Company (MTC) paced the gains, jumping 3.01%. An unidentified Saudi investor is planning to buy 10% of MTC,

daily reported on Saturday, citing unidentified sources.

"There are rumours about an investor buying a stake," said Abdulmohsen al-Bahar, portfolio manager at Noor Financial Investment Co. "But it's also one of the best shares in Kuwait in terms of growth potential, dividends, everything."

Shares of National Mobile Telecommunications Company (Wataniya) jumped 3.68% after the firm posted a 131% surge in first-quarter profit.

Oman's main stock index closed lower for the second trading day, paced by Oman Telecommunications Company. The index dropped 0.66% to 5,814.83 points, while Omantel fell 0.895%. "It is a healthy correction that had to happen," saidShantonu Roy, senior research analyst at Amwal Investment.

"There is support at 5,802 points." Oman's index was up 4.87% this year to Thursday's close, the second-best performer in the Gulf.

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