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Tue 17 Jul 2012 03:39 PM

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UAE, Qatar markets rally on Q2 hopes

UAE and Qatar markets extend gains, with Dubai finishing at a 10-week high

UAE, Qatar markets rally on Q2 hopes
UAE and Qatar markets extend gains, with Dubai finishing at a 10-week high.

UAE and Qatar markets extend gains, with Dubai finishing at a 10-week high as investors pick up stocks on earnings optimism.

Dubai's index ends 0.9 percent higher at 1,529 points, its highest close since May 8.

"The index broke the 200-day moving average at 1,505-1,515 and this gives it more strength towards 1,546 in the near-term," says Amjad Bakir, head of MENA Corp Securities.

Bellwether Emaar Properties gains 1.2 percent to close at AED3.27 per share.

"Emaar is trading near a very strong resistance level of 3.33 and at the same time its showing a bearish divergence on the half hour chart," Bakir adds, suggesting profit-taking at this price level.

Contractors Drake and Scull and Arabtec rise 3 and 1 percent respectively.

Abu Dhabi's bourse also gains, closing 0.2 percent higher at 2,463 points.

In Doha, the benchmark advances 0.2 percent to 8,314 points, its highest close since June 11.

Banks support the rally, with Commercial Bank of Qatar up 1.4 percent, while Qatar National Bank and Doha Bank add 0.4 and 1.4 percent respectively.

0950 GMT - Saudi Arabia's investors cut exposure in banking and cements stocks after some post quarterly earnings, while sentiment improves in petrochemical stocks.

Heavyweight Al Rajhi Bank falls 1.7 percent, Samba Financial Group slips 0.7 percent and Alinma Bank sheds 1.1 percent.

Yanbu Cement falls 1.9 percent, after posting a second-quarter net profit decrease of 5 percent year-on-year.

The firm cited lower profit due to increase in cost of sales and a decline in sales.

Yamama Cement slips 0.2 percent. Last week, it said it made a quarterly profit of SAR215.5m compared with SAR149.9m in the year-earlier period.

"Yamama Cement has reported a disappointing set of results for Q2 with all profit lines declining 2 to 5 percent year-on-year and 12 percent lower than our estimates," NCB Capital says in a research note. "We believe the weak results are mainly attributed to the lower-than-expected cement sales and lower cement prices."

The kingdom's index slips 0.4 percent to 6,619 points, down for a third straight session.

The petrochemical index advances 0.4 percent, up for a second session since Sunday's 16-month low.

Investors sold petrochemical stocks after a set of below-estimated earnings, which raised concerns on Saudi Basic Industries Corp's (SABIC) pending earnings.

SABIC is up 0.3 percent, extending gains. It slumped to a 16-month low on Sunday.

Elsewhere, Oman's bourse ends 0.1 percent higher at 5,504 points and Kuwait eases 0.07 points to 5,856 points.

0739 GMT - UAE property stocks extend gains ahead of quarterly earnings, while Qatar's bourse climbs to a near six-week high.

Dubai bellwether Emaar Properties rises 1.2 percent, its highest intraday level since May 1. Builder Arabtec adds 2 percent.

The emirate's bourse climbs 0.6 percent to 1,526 points, while counterpart Abu Dhabi trades near-flat.

Sorouh Real Estate advances 2 percent.

Elsewhere, Qatar's benchmark rallies 0.4 percent to 8,332 points, reaching its highest level since June 6.

Volumes remain muted on Doha's market, but bargain hunters are stock-picking ahead of earnings. The index had slumped to a 10-month low on June 28.

Heavyweight Industries Qatar gains 1.1 percent, Qatar National Bank rises 0.8 percent and Commercial Bank of Qatar adds 1.7 percent.

Barwa Real Estate is up 0.5 percent.

"People are hoping something will happen this year. Big projects related to World Cup 2022 will be announced by year-end or early next year," says Yassir Y Mckee, wealth manager at Al Rayan Financial Brokerage.

"People are hesitant but there are companies with strong fundamentals, subcontractors for the larger projects, who will get a piece of the pie. I would invest in them any day."

In Muscat, National Bank of Oman is up 0.7 percent.

The sultanate's fourth-largest lender by market capitalisation, posted a 13.2 percent rise in second-quarter net profit, edging slightly ahead of analysts' expectations.

Muscat's benchmark climbs 0.2 percent to 5,509 points, up for a third session since Thursday's seven-and-a-half-month low.

0545 GMT - Gulf investors are likely to be cautious on Tuesday ahead of the US Federal Reserve chairman's review on the world's largest economy later in the day.

"This is a season which is dead and when all heads are turned towards Europe and the US," says a Dubai-based analyst who asked not to be identified.

Asian shares surged and the euro recovered on Tuesday as investors covered short positions and hunted for bargains while awaiting Ben Bernanke's view on the US economy.

National Bank of Oman may see some positive reaction after posting a 13.2 percent rise in second-quarter profit, edging slightly ahead of analysts' estimates.

Elsewhere, Zain Saudi's US$1.6bn rights issue has so far sold only 54 percent of shares available, the lead manager said.

Shares in Saudi Arabia's number three telecom operator tumbled to a record low on Monday, with Tuesday the last trading day of the rights issue.g to a February note from Fitch Ratings.