Petchems help Saudi hit new 7-month peak

Petrochemicals helped Saudi Arabia's index TASI

edge up to a new seven-month high, although volumes slumped with

investors cautious as the fourth-quarter results season nears.

Saudi Kayan rose 0.8 percent and Yanbu National

Petrochemical Co's (Yansab) added 0.6 percent.

Saudi Basic Industries Corp (SABIC) rose 0.2

percent after it recommended a SR2per share dividend for

the second half of 2010.

"SABIC's dividend was in line with expectations, which is

shown in the share price reaction today," said a Riyadh-based

trader who asked not to be identified.

The index climbed 0.3 percent to 6,595 points, its highest

finish since May 12.

Volumes slipped to a two-week low.

"We are at a cross roads, waiting to see if the Q4 numbers

will show that the gains in petrochemicals stocks are

justified," added the trader.

"With results only a couple of weeks away, people aren't

going to pump big money into the market."

The petrochemicals index rose 0.3 percent, taking

its year-to-date gains to 21 percent.

Saudi firms are usually the first in the Middle East to

announce quarterly earnings, with results season expected to

start in early January.

Volumes slump to a 16-week low as Dubai's index

DFM ended lower for a seventh session in nine and further

declines were forecast.

"In the absence of local institutions, day traders are

running the show and they are looking at the technical charts to

make a quick gain and that isn't very useful to the market and

that's why it's moving sideways to lower," said Mohammed Yasin,

CAPM Investment chief investment officer.

Emaar Properties fell 1.1 percent, Aramex

dropped 2.4 percent and Tabreed slipped 2.3

percent.

The index fell 0.5 percent to 1,632 points as volumes slumped

to their lowest level since Sept. 1.

"Volumes are worrying - local institutions are not active,"

said Yasin. "We could yet see a rally in the final two or three

sessions of the year, but if selling continues in the meantime,

investors will be trying to take the market up from a lower

base."

Abu Dhabi's index ADI fell 0.2 percent to 2,716 points.

Qatar's index QSI made its largest decline

for four weeks as slumping trading volumes suggest a World Cup

rally is over.

Qatar Telecom dropped 1.6 percent, Barwa Real Estate

fell 2.6 percent and Qatar Gas Transport Co (Nakilat) dipped 2.9 percent.

The index fell 1.2 percent to 8,631 points, its biggest

decline since November 23 as losers outnumber gainers 18 to one.

The benchmark was up 5.5 percent since Qatar was chosen to

host the 2022 soccer World Cup. Less than 8.4 million shares

traded, the lowest total since the December 2 FIFA vote.

"The market is moving sideways," said Hani Girgis, assistant

chief dealer at Dlala brokerage.

He said the index has two possible fates before the

year-end; breaking 9,000 points or slipping back to 8,500

points, with market liquidity likely to determine direction.

"Volumes in the past week have been very weak and we need

more liquidity to break higher," Girgis added.

Kuwait's Kharafi-linked stocks tumbled as

investors fret the group's consortium will not complete its deal

to sell a 46-percent stake in telecoms operator Zain.

Kharafi, a major Zain shareholder, has a provisional deal to

sell the Zain stake to Abu Dhabi's Etisalat, but there

is increasing market talk that Kharafi has not been able to

recruit enough Zain investors to reach the agreed 46 percent.

The deal also requires Zain to sell its stake in Saudi

affiliate Zain Saudi. No formal bids have yet been

revealed.

Etisalat has said any deal could fail if definitive

documents are not signed by January 15, 2011.

"Everybody is nervous about the Zain deal -- as time goes

on, the picture gets bleaker as we wait confirmation that

Kharafi has the 46 percent and Zain Saudi has been sold," says a

Kuwait trader who asked not to be identified.

"Kharafi stocks fell today and dragged the rest of the

market down as well."

Zain ended unchanged, but National Investments Co dropped 5 percent and National Industries Group fell 4.2 percent. The latter pair are majority-owned by Kharafi.

Kuwait's index KWSE fell 0.7 percent to 6,798 points.

Zain Saudi fell .3 percent.

Most Oman bluechips fell as fears over declines

in Asian markets spurred local retail investors to sell, but buying

in Renaissance Services and Oman Telecommunications Co (Omantel) enabled the country's index MSI to end higher.

Bank Muscat dropped 1 percent and Bank Dhofar

fell 1.3 percent.

Renaissance Services rose 2.5 percent after it

bought Abu Dhabi-based Al Wasita Emirates for Services and

Catering in a AED56m ($15.25m) deal to expand

its contract services operations in the UAE.

Omantel climbed 0.2 percent and rival telecoms operator

Nawras ended flat.

"There was selling towards the end of the session, with some

traders liquidating positions on fears over declines in Asian

markets," said Adel Nasr, United Securities brokerage manager.

"Banks were under pressure, but there was institutional

buying on Omantel, Renaissance and Nawras."