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Mon 8 Feb 2010 11:04 AM

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Property stocks rebound to lift Dubai index

UPDATE 5: Shuaa up 4%, Emaar advances 1.25%, to lead UAE indexes to higher closes.

Indices in Dubai and Abu Dhabi rebounded from their previous day's losses helped by gains in financial stocks but volumes were low in both the markets.Shares in Shuaa Capital rose 4 percent, to recover some ground two days after the investment bank posted a $42 million loss and ahead of the company providing details on its future strategy later on Monday.

Emaar Properties, the company with the highest weightage in the index, gained 1.25 percent.

Islamic Arab Insurance Co gained 8.75 percent in Dubai to touch a three-week high after the Islamic insurer swung to a net profit in 2009.

Dubai index gained 0.9 percent while Abu Dhabi rose 0.8 percent.

"We went down yesterday a bit aggressively, hence the rebound but volumes are very low in Abu Dhabi and Dubai," Shawkat Rasian, senior relationship manager at Prime Emirates said.

"Investors remain in the sidelines but volumes would start to build after some companies post their results.

Abu Dhabi Commercial Bank rose 3.5 percent and Aldaar Properties gained 2 percent. RAK Bank gained 5.5 percent after reporting its 2009 results.

Kuwait's index rose 0.7 percent Monday backed mainly by a surge in the shares of telecom operator Zain, which rallied for the second consecutive day to touch a two-week high.

"Kuwait massively underperformed in 2009 - there are some political and financial sector issues, but we expect a government support package to come in and that could trigger a rally on the Kuwait market," said Shakeel Sarwar, Sico investment bank head of asset management.

Zain, whose chief executive resigned last week, on Monday said it has not received any offers for the sale of its Zain Africa assets.

"The stock (Zain) used to trade at 890-900 levels and the downside was limited from there. Investors are taking the opportunity to buy the stock at current levels," Ammar Hajeyah, assistant vice-president at Global Investment House said.

Shares of financial firms, mainly banks, also rallied with National Bank of Kuwait (NBK), the country's biggest lender, rising 3.45 percent.

Qatar banks rose on Monday with Commercial Bank of Qatar leading the sector with a 2.5 percent jump.

Other banking shares also rose as the index rebounded from Sunday's drop.

Qatar Islamic Bank, the country's second-largest lender by market value, was up 0.5 percent while Doha Bank, Qatar's fifth-largest bank by market value, was up 0.8 percent.

Industries Qatar rose 0.8 percent helped by a slight increase in oil prices.

Trading volumes, however, touched a two-week low as investors remained on the sidelines in the absence of any significant catalysts.

Saudi Arabian Fertilizer Co (Safco) rose 4.4 percent helping Saudi index edge higher on Monday.

Saudi Basic Industries Corp rose 0.8 percent after a two-day fall as oil prices rebounded slightly. Other bluechip stocks also rose helping the index sustain its rise.

"The TASI ended the session flat after Saturday's sell-off further validating the support at 6,200 points. This level has been tested frequently in recent days making it a key point at this stage," Shuaa Capital wrote in a research note on Monday

"... A break below the support will carry short-term negative implications for the market and with the absence of buying power, the risk of witnessing such a break is high. Traders are advised to be very cautious and hold off on buying until clear positive signs begin to emerge."

Samba Financial Group rose 1.4 percent while conglomerate Savola Group was up 1.5 percent.

The index rose 0.5 percent to 6,248 points.

Abu Dhabi's index rose 0.6 percent on thin volumes as most Gulf markets rebounded from Sunday's steep fall.

Property stocks rose with Aldar Properties gaining 2.8 percent and Sorouh Real Estate rising 1.3 percent but volumes were very thin across the board.

"We went down yesterday a bit aggressively, hence the rebound but volumes are very low in Abu Dhabi and Dubai," Shawkat Rasian, senior relationship manager at Prime Emirates said.

"Investors remain in the sidelines but volumes would start to build after some companies post their results."

RAK Bank was the top-gainer in Abu Dhabi index after reporting its 2009 results. The bank's stock rose 5.5 percent. (Reuters)