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Wed 23 Feb 2011 06:47 PM

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Middle East shares gain on bets drop overdone given rising oil

Abu Dhabi’s index ends higher for the first time in five days

Middle East shares gain on bets drop overdone given rising oil
An Emirati man follows the stock market activity at the Dubai Financial Market in the Gulf emirate on December 14, 2009. Dubais stock market rose 10.13 percent in early trade after the government said it will pay 4.1 billion dollars to cover maturing Islamic bonds issued by its Nakheel property developer. AFP PHOTO/STR (Photo credit should read -/AFP/Getty Images)

Middle East shares advanced, sending
Abu Dhabi’s index higher for the first time in five days, on bets declines
triggered by unrest in the region are overdone as Bahrain tensions ease and oil
prices soar. Dubai bonds gained.

First Gulf Bank, the lender
controlled by Abu Dhabi’s ruling family, surged 3.4 percent. In Saudi Arabia,
Saudi Basic Industries Corp, the world’s largest petrochemicals maker, advanced
as much as 1.8 percent. The ADX General Index rose 1.1 percent, the most since
October 13, to 2,608.24 at the 2pm close in Abu Dhabi. The gauge has lost 2.8
percent this week. Saudi Arabia’s measure jumped 1 percent at 2pm in Riyadh
after King Abdullah earmarked more funds for housing and social welfare.

The possibility of a “peaceful
solution for Bahrain coupled with high oil prices and increased production
could be good for the medium to long term provided political pressure
subsides,” said Nabil Farhat, partner at Abu Dhabi-based Al Fajer Securities.
The unrest in Libya “is pushing oil prices up with the potential that the
U.A.E. and Saudi Arabia will increase output.”

Bahrain’s Crown Prince Salman bin
Hamad Al Khalifa has called for national dialogue to help ease the political
turmoil that started Feb. 14 with mainly Shiite protests in the Arabian Gulf
island kingdom. Bahrain’s Al Wefaq group, the kingdom’s largest Shiite Muslim
opposition bloc, said it’s waiting for “significant steps” from the government
to heed the call. Bahrain started a release of political prisoners, Al-Arabiya
reported on Wednesday.

Anti-government protests, ignited by
the ouster of Tunisia’s president last month and energised by the fall of
Egypt’s president on February 11, have spread to Libya, Yemen, Algeria, Iran
and Morocco. Moody’s Investors Service today placed Bahrain’s A3 government
bond rating on review for a possible downgrade.

Oil climbed to the highest in more
than two years as Libya’s violent uprising threatened to disrupt exports from
Africa’s third-biggest supplier and spread to crude-producing nations in the
Middle East.

Crude for April delivery advanced as
much as 0.9 percent to $96.25 a barrel in electronic trading on the New York
Mercantile Exchange, the highest since Oct. 2, 2008. Libyan leader Muammar
Qaddafi vowed to fight a growing rebellion until his “last drop of blood.”

The Organisation of Petroleum
Exporting Countries will boost output if there is a supply shortage, Saudi
Arabian Oil Minister Ali al-Naimi said yesterday. Libya is the holder of
Africa’s largest oil reserves, while the six nations of the Gulf Cooperation
Council, including Saudi Arabia, supply about fifth of the world’s oil.

Dubai’s measure gained 1.3 percent
and Kuwait’s SE Price Index rose 0.8 percent. Bahrain’s BB All Share Index
increased 0.3 percent, while Qatar’s QE Index slipped 0.1 percent. Oman’s MSM30
dropped 1.1 percent.

 

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