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Wed 22 Dec 2010 11:29 AM

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Saudi edges up to new high; SABIC slips

UPDATE 2: TASI reaches a new seven-month high in a mixed session for the bluechips

Saudi edges up to new high; SABIC slips
STOCK WATCH: DP Worlds shares rose 5.2 percent, reaching their highest level since October 14, 2008 (Getty Images)

Saudi Arabia's index TASI edged up slightly, reaching a new
seven-month high in a mixed session for the bluechips.

Saudi Electricity Co climbed 1.1 percent and Samba Financial
Group added 0.9 percent, but Banque Saudi Fransi dropped 0.9 percent and Saudi
Basic Industries Corp (SABIC) fell 0.5 percent.

The index rose 0.06 percent to 6,610 points, its sixth gain
in seven sessions and highest finish since May 12.

On Monday, Saudi Arabia announced a record budget of SR580bn
($155bn) in 2011.

"Saudi Arabia's market hardly reacts to the budget, but
in the long term the impact will be positive," says Shakeel Sarwar, Sico
investment bank head of asset management.

"Next year, we'll see infrastructure spending having a
trickle impact on many sectors of the Saudi economy."

 Emaar Properties fell
following a report by Indian media that the developer's Indian unit lost a $41m
court case in India.

Emaar fell 1.4 percent. The developer failed to stop Indian
authorities from cashing in a Rs1.83bn ($40.55m) bank guarantee due to a delay
in completing the construction of the Commonwealth Games village in New Delhi,
The Times of India reported on Tuesday.

"The case isn't a big deal, but the pressure on Emaar's
stock was more pronounced given the low volumes in the market," said Tarik
Lotfy, Arqaam Capital Head of MENA equities.

Dubai's index DFM slipped 0.1 percent to 1,623 points, its
lowest finish since September  7. Volumes
increased slightly from Tuesday's 16-week low.

"Institutional trading has largely dried up due to seasonal
issues," said Lotfy.

"We may have drifted lower over the past couple of
weeks, but I'm bullish for next year and expect interest to return and
sentiment to improve over the course of Q1 - UAE markets are under-owned, so
the risk is to the upside."

Banks helped Abu Dhabi's index ADI ease away from Tuesday's
11-week low. First Gulf Bank climbed 1.6 percent and Abu Dhabi Islamic Bank climbed
1.4 percent.

The benchmark edged up 0.05 percent to 2,670 points.
($1=45.13 Indian Rupee)

 Kuwait's bluechips were
flat for a second day on slim volumes, indicating institutions are largely
absent, spurring retail traders to target small-cap names.

Nine of the 10 largest stocks ended unchanged. Ahli United
Bank was the exception, rising 1.4 percent.

"The bluechips are correlated to whatever happens with
Zain and it's a complicated issue," said Essa al-Hassawi, assistant
manager at Zumorroda Investment Co in Kuwait.

Kharafi-linked stocks rebound following recent declines,
with National Industries Group adding 2.9 percent and Kuwait Food Co climbing
1.3 percent.

Kharafi is a major shareholder in Zain and is leading a
consortium selling a 46 percent stake in the telecoms operator to Abu Dhabi's
Etisalat. The deal deadline is January 15, but some analysts expect this to be
extended.

After market hours, a Kuwait court dismissed a case filed by
Zain shareholder Al Fawares Holding to stop due diligence in the stake sale.

Oman's Renaissance Services extended gains following its
purchase of a UAE company, helping Oman's index MSI hit a 32-week closing high.

Renaissance climbed 2 percent to its highest finish since
September 23. 2008. On Monday, it said it had 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.

Most bluechips slid. Bank Muscat fell 0.4 percent and
telecoms operator Nawras dropped 1 percent.

"Most of the brokers are pushing traders to close
positions before the year-end, but there was good buying from asset managers
and foreign institutions," said Adel Nasr, United Securities brokerage
manager.

"The main buying was in Bank Sohar, Bank Muscat and
Nawras, even though some of these stocks fell, and that is a very positive
signal for the start of next year.

"Other Gulf markets are similar and I don't think we'll
see any surge until 2011," Nasr added.

Bank Sohar rose 0.5 percent.

The index climbed 0.1 percent to 6,719 points, its highest
finish since May 12.

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