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Tue 27 Jul 2010 09:54 AM

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Saudi hits month-high; Rajhi heads gainers

UPDATE 4: Saudi Arabia's index TASI ends higher for a third day in four.

Saudi hits month-high; Rajhi heads gainers
(Getty Images)

Saudi Arabia's index TASI ended higher for a third day in four, reaching a month-high as local and regional investors rotated money back into the kingdom following a quiet couple of weeks on the bourse.

Al Rajhi Bank climbed 1.6 percent, Saudi Electricity added 1.5 percent and Rabigh Refining and Petrochemical Co gained 2.8 percent.

"Some of the Saudi names are still oversold - volumes have been quite light for the past couple of weeks, so we're now seeing a retracement of cash from other regional markets back into Saudi," says Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.

"Banks look steady and there's an increase in interest at these levels."

The index climbed 0.9 percent to 6,275 points, its highest close since June 28. Volumes also hit a month high.

Sorouh Real Estate tumbled after reporting a sharp drop in second-quarter profit and other Abu Dhabi bluechips also struggled, weighing on the emirate's index ADI.

Sorouh fell 4.4 percent to 1.73 dirhams, within four fils of setting a new four-year low. The developer blamed its plunging profit on a lack of land sales.

Rival Aldar Properties, which is forecast to report a quarterly loss of 130 million dirhams, dropped 2 percent.

First Gulf Bank climbed 0.7 percent, helping the index edge 0.05 percent higher to 2,561 points.

"The market is in a pretty comfortable range, with p-e ratios at realistic levels, so I don't think there's too much pressure on the market to head south," said Vyas Jayabhanu, head of investments, Al Dhafra Financial Broker.

Dubai's index DFM fell 0.7 percent to 1,499 points as a late sell-off hits shares.

Emaar Properties fell 0.9 percent to a three-week low and Drake & Scull dipped 2 percent.

Kuwait Food Co surged to help the country's index KWSE end higher for a fifth day.

The firm climbed 7.3 percent to a three-month high, but other heavyweight stocks were mixed.

National Bank of Kuwait fell 1.6 percent and Gulf Bank ended flat to hold at a month high. The latter reported a $5.1 million second-quarter profit after market hours on Tuesday, swinging from a loss in the year-earlier as a one-off disposal boosted 2010 revenues.

"Gulf Bank made a significant move upward prior to its results and looking at today's volume I'd say the stock hasn't reacted at all," said a Kuwait trader who asked not to be identified.

The index climbed 0.5 percent to 6,685 points.

"It's too early to say investors have formed a clear sentiment about Q2 earnings - most people are sitting on the sidelines," said the trader.

"The market is moving forward, but it needs to correct a bit, so I expect to see some profit taking in the near future," he added.

Qatar's index QSI rose 0.3 percent to 6,938 points as volumes fell by about a third from the day before.

Industries Qatar was the main support, rising 1.2 percent.

Local institutions bought Oman bank stocks, helping the country's index MSI ended higher for a second day in three.

Bank Sohar was the most active stock, rising 0.5 percent after reporting a second-quarter net profit of 3.2 million rials ($8.31m).

Galfar Engineering climbed 1.1 percent and, together with Bank Sohar, accounted for more than a fifth of all shares changing hands on the index.

"There was strong buying from asset managers and local pension funds, into banks mainly," says Adel Nasr, United Securities brokerage manager.

"We saw some buying in Bank Sohar after its results and Galfar, with rumours Galfar will soon be awarded some new contracts and so the stock is moving up."

The index climbed 0.7 percent to 6,208 points, a week high.

"I believe the market will continue to move up for the next couple of days before cooling down in August," added Nasr. (Reuters)

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