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Wed 6 Jan 2010 10:11 AM

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Kingdom Holding shares surge to boost Saudi index

UPDATE 6: Dubai's index ends slightly up in signs market is preserve of day traders.

Kingdom Holding Co surged after the firm said its main shareholder has given it Citigroup shares worth $597.3 million, helping Saudi Arabia's index end higher for a fifth day.

The company also said it will cut its capital by 40 percent. Kingdom climbed 9.6 percent.

The index climbed 0.4 percent to 6,261 points.

"Saudi Arabia has announced a record budget, which means more government spending and this should help companies across all sectors," said Rami Sidani, Schroders Middle East head of investment.

"The region has lagged global emerging markets, so we should see a good inflow from international funds into our markets. With oil stabilising around $80, there should be more interest in the Gulf."

Saudi Basic Industries Corp (SABIC), the largest listed company in the Gulf Arab region, ended 1.5 percent higher, touching a 14-month intraday high.

Oil is down 0.4 percent at $81.46 a barrel at 4.36pm Dubai time. It rose for the previous nine sessions.

Dubai's index ended slightly higher as bluechip stocks gave up most of their early gains in further signs the market is the preserve of day traders.

Emaar Properties rose 0.5 percent, while Dubai Financial Market ended flat, having been up 1.1 percent intraday.

Arabtec fell 0.4 percent to AED2.72. HC Research on Wednesday cut its share-price target on the construction firm by 6 percent to AED3.94.

"I think we will probably trade sideways until we get profit announcement and we can get a good understanding about the quality of earnings, not just the headline figures," said a Qatar-based analyst who asked not to be identified.

"Have companies really cleared up their balance sheets to the point where they are now worth buying?"

The index edged up 0.1 percent to 1,820 points. Trading volumes fell by almost half from the day before.

Emirates Telecommunications Corp (Etisalat) fell 0.5 percent, dragging Abu Dhabi's index to its third decline in five sessions.

First Gulf Bank dropped 0.9 percent as investors booked profits from a three-day rally since it received approval to extend a share buyback programme.

Waha Capital climbed 5.5 percent after the firm said it had finalised a $1.8bn financing deal for the UAE Armed Forces to buy Airbus and Boeing military aircraft.

Abu Dhabi's benchmark slipped 0.3 percent to 2,767 points, slipping from the previous day's three-week high.

Qatar's index rose for a second session to hit a two-week high, but volumes were low and an analyst warned the market is unlikely to escape its range-bound trend until corporate earnings come out.

Commercial Bank of Qatar and Doha Bank each climbed 1.3 percent and were among the cheaper Qatar banks by price to earnings ratio, yet bank stocks may still prove over-valued, a Qatar-based analyst said.

The index climbed 0.4 percent to 7,032 points, its highest finish since December 24. Volumes were less than half the 12-month daily average.

Kuwait's index ended lower for the second session in three as investors continued to take profits from an end-of-year surge.

National Bank of Kuwait fell 1.8 percent. Zain climbed 1 percent, but other Kharafi group companies faltered, with National Industries Group and Gulf Cable dropping 1.6 and 1.2 percent respectively.

Agility climbed 5.3 percent after a Kuwait newspaper said the country's foreign ministry is trying to help the logistics firm resolve a US court case where it stands accused of defrauding the US Army.

The index slipped 0.02 percent to 6,969 points as a late rally limited losses. Trading volumes slumped by nearly half from the day before.

Bahrain's measure also retreated, slipping 0.2 percent to 1,447 points.

Bank Muscat helped Oman's index hit an 11-week high as local pension funds built positions in expectation of strong fourth-quarter earnings.

Bank Muscat climbed 4.1 percent and Oman Telecommunications Co (Omantel) added 2.2 percent. National Bank of Oman slipped 1.2 percent.

The index rose 0.3 percent to 6,487 points, its highest finish since October 27.

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