The Saudi market recouped initial losses to edge up to a new 17-month high and is tipped to lead a rally in regional markets.
The Tadawul All-Share Index (TASI) climbed 0.33 percent to 6,722.04 points on Sunday. The sector activity was positively biased with 12 out of 15 sectors closing with gains ranging from 0.08 percent by the Energy & Utilities sector to 0.77 percent by the Cement sector. The remaining three sectors namely Retail, Multi- Investment and Hotel & Tourism closed with losses of 0.54 percent, 0.58 percent and 0.69 percent respectively. The overall market breadth was strongly positive with 74 advancers against 44 decliners giving it an AD ratio of 1.68, the Jeddah-based Financial Transaction House (FTH) said in its daily market commentary.
Abu Dhabi and Oman rose, but Qatar and Kuwait fell, with the latter weighed by a 5.1 percent decline in Agility.
Dubai's index climbed 2.8 percent to 1,774 points - its highest finish since Jan. 11. Dubai Financial Market jumped 6.3 percent and Emaar Properties added 4.9 percent.
"People are still expecting something positive to come out of Dubai World," said Chamel Fahmy, Beltone Financial regional senior sales trader.
Dubai World is restructuring about $26 billion in debts, with Dubai's index down 15.2 percent since the conglomerate made a shock standstill request in November.
"I don't think an announcement will trigger a profit-taking wave, because valuations are the most attractive in the region," said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments.
"It all depends on what the restructuring entails - if Dubai World offers a seven-year roll-over and full repayment, then this is already discounted in the market, but if there's a government guarantee the market will fly."
Kuwait's index fell 0.08 percent to 7,408 points for a fourth day as Agility slumped to a six-week low after a newspaper said the logistics firm laid off about 500 staff, with more job losses likely.
Zain climbed 1.5 percent, equaling last week's five-month high as the possible completion of its $9 billion African asset sale nears, with the board of buyer Bharti Airtel approving its offer on Saturday.
National Investments Co. (NIC) climbed 1.2 percent. The Kharafi group is a major shareholder in Zain, NIC and a host of other Kuwait stocks.
"Zain is up massively, so we didn't expect a significant appreciation from this latest news," said Naser Al-Nafisi, general manager for Al-Joman Center for Economic Consultancy in Kuwait. "We expect there will be significant profit-taking in Zain and other Kharafi companies once the deal is finalized."
This could see Kharafi-affiliated stocks fall about 10 percent, Al-Nafisi said, while the index could lose 5 percent.
"I think the market will be sideways to slightly lower until the end of March as we wait for an official Zain announcement," Al-Nafisi added.
