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Thu 21 Feb 2013 11:47 AM

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Oman bourse hits ten-month high; UAE markets mixed

Muscat's bourse climbs to a ten-month high, catching up with gains on other Gulf markets

Oman bourse hits ten-month high; UAE markets mixed

Muscat's bourse climbs to a ten-month high, catching up with gains on other Gulf markets as a strong fourth-quarter earnings season and upbeat economic prospects in Oman buoy sentiment.

Shares in Bank Muscat, which forecast its credit growth will be around 14-15 percent this year, rise 0.2 percent.

Oman's largest lender has agreed on an equity investment worth OMR75.1m (US$195.1m) from World Bank unit International Finance Corp, a move which will bolster its capital base.

Muscat's index climbs 0.6 percent to 5,993 points, reaching its highest since April 2012. It has rallied since slumping to a three-year low in July.

The benchmark was up 3.4 percent at Wednesday's close, the worst performing Gulf Arab market.

"Earnings were generally in line and the surprises were positive," says Vickneswaran Gowribalan, head of asset management at an Omani bank.

The market is coming off a low base, so its potential downside is limited, he adds.

Oman's parliament, the Shura Council, approved a hike in the private sector minimum wage for Omani citizens of more than 60 percent earlier this month.

This has added to the positive sentiment in the market, because it should mean some consumers have more money to spend in the economy, although the labour-intensive manufacturing sector will likely be most affected by higher staff costs.

"Consumer, telecom and banking will benefit from the new policies coming in, but it will take 12-15 months to materialise," Gowribalan adds.

Oman's economy is forecast to grow 4.4 percent in 2013, according to a Reuters poll in January.

Elsewhere, UAE markets are mixed, with Dubai's index slipping 0.2 percent to 1,919 points. Abu Dhabi's benchmark gains 0.3 percent to 3,019 points, a fresh 39-month high.

In Qatar, shares in Doha Bank drop 9.9 percent to QAR51.1 after the stock hits goes ex-dividend.

Doha's index sheds 0.4 percent to 8,769 points, trimming 2013 gains to 4.5 percent.