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Wed 10 Feb 2010 12:43 AM

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Investors cautious as dividends push ME markets up

Speculators trying to push up share prices ahead of foreign investors coming in.

Investors cautious as dividends push ME markets up
HIGHER MARKETS: Mid East markets saw limited gains as speculations over dividends and earnings pushed markets higher. (Getty Images)

Speculation over dividends and earnings pushed most Middle East markets higher on Tuesday, but gains were limited and investors remained cautious amid an uncertain global outlook and a dearth of local news.

Saudi Arabia's index fell to a five week low as the world's top oil exporter belatedly reacted to crude's four week, 12 percent slide and the consensus view is for further sideways regional trading.

Kuwait's Agility rose 6.7 percent after saying it remained in negotiations over a US court case.

Dubai's index was the biggest gainer, gaining 0.9 percent in its sixth gain in seven sessions. Dubai Islamic Bank (DIB) climbed 5.9 percent to a four-week high.

Emaar Properties added 0.9 percent. Both firms have yet to announce earnings, with the deadline less than a week away.

Ayman el Saheb, Darahem Financial Brokerage director of operations, said: "DIB was one of the best cash dividend payers last year, so as its results disclosure nears, speculators may be buying in the hope of another good dividend this year."

Abu Dhabi Islamic Bank climbed 4.2 percent to an eight week high after saying it may allow foreigners to hold shares.

Saheb said: "Speculators are trying to push up the share price ahead of foreign investors coming in."

Qatar National Bank fell 1.9 percent after going ex-dividend as traders cashed in Thursday's seven week high.

Mohamed Abu Ghoush, head of equities brokerage at Ahli Bank, said: "The performance of QNB was very good given that today it went ex-dividend and so buyers were no longer eligible for this year's dividend payout."

He added: "Most of the banks have announced good cash dividends and the expectations are that investors could reinvest this money into the market, so there should be more liquidity coming in."

Market heavyweight Industries Qatar climbed 0.6 percent, extending its winning run after a tricky January.

Ali Khan, managing director and head of brokerage at Arqaam Capital, said: "Industries Qatar might put a bit of life back into the Doha market if its earnings come in above forecasts and there's every reason to think they might after SABIC beat expectations - both companies have similar business models."

Saudi Basic Industries Corp (SABIC) had reported a 15 fold rise in fourth quarter profit.

SABIC fell 0.3 percent as Saudi Arabia's index slumped to its lowest finish since Jan. 3, wiping out an early year rally.

Speaking to Reuters, a Riyadh based analyst, who asked not to be identified, said: "Saudi had been a big outperformer year-to-date -- even when oil slipped towards $70 we didn't follow."

He added: "But there's now a lack of local news...Saudi could be re-coupling to international markets."

Oman Telecommunications Co (Omantel) and Galfar Engineering rose 0.4 and 4.1 percent respectively, while Renaissance Services added 1.5 percent.

Adel Nasr, United Securities brokerage manager, said: "Many asset managers and foreign institutions are buying the service sector because these three companies have yet to announce their results."

He added: "Galfar is witnessing a technical rebound, Renaissance has strong buying in expectation of it reporting excellent results and investors believe Omantel will offer a good dividend."

Emerging markets lifted world stocks. (Reuters)

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