Other Middle East markets also rose, tracking gains on
global bourses.
Dubai's Arabtec rose 1.6 percent to 1.93 dirhams after a
broker gave the builder a buy rating and a target price of 2.4 dirhams. Union
Properties climbed 1.5 percent.
Property stocks are typically the most volatile on
markets in the United Arab Emirates and so tend to overshoot on the way up and
down, attracting speculators.
"Real estate stocks are doing well because of the
(share) price factor," said Vyas Jayabhanu, head of investments, Al-Dhafra
Financial Broker. "They have dropped quite a lot and so you have a rally.
However, it's improbable that it will sustain. Dubai needs an inflow of
funds."
The Dubai index rose 0.6 percent to 1,701 points - its
highest close since May 18, taking its September gains to 14.7 percent as
traders bet a post-Ramadan rally, often a feature of regional markets, can be
sustained. Yet the benchmark is down 5.7 percent in 2010 and 73 percent below a
2008 peak as the emirate's property crash and its estimated $110 billion of
debts weighed on stocks.
"Dubai's real estate sector will take a long time to
solve its structural issues and rebalance the supply-demand equation,"
said Shahid Hameed, Global Investment House head of asset management for the
Gulf region.
"The UAE, and Dubai in particular, was a real estate
play, either directly or indirectly, and the economy has to find a new growth
engine, which I don't see happening at present. Hence, I wouldn't think
equities can make a sustained rally - current gains are more of a dead cat
bounce."
The Abu Dhabi index rose 0.2 percent to 2,638 points.
Saudi Arabia's petrochemical index hit a three-month
high. Product prices are up 5 to 8 percent this month as unscheduled plant
shutdowns squeezed supply, said Ankit Gupta, senior research analyst at
Securities & Investment Company (SICO) in Bahrain.
"Although demand hasn't picked up significantly,
lower than expected supplies...support global prices," said Gupta.
"So, (it's) good for producers who are operating at the expense of
producers who faced such shutdowns."
Gupta is cautious about the sector's prospects.
"We remain neutral due to lack of near-term
catalysts, limited incremental cost pressures and the expected new supplies
during the fourth quarter," added Gupta. "We favor Tasnee, SAFCO and
Advanced Petrochemicals in the short-term."
Tasnee, also known as National Industrialization Co.,
fell 0.3 percent, easing from Monday's 20-week high. SAFCO (Saudi Arabian
Fertilizers Co.), fell by the same margin to end slightly below this week's
six-month peak, while Advanced Petrochemical Co. rose 0.8 percent.
The Tadawul All-Share Index (TAS) rose 0.25 percent to
6,434.9 points. The sector activity for the day was mostly positively biased
with 12 out of 15 sectors closing with gains ranging from 0.01 percent by the
Insurance sector to 1.50 percent by the Media and Publishing sector. On the
other hand losing sectors were Real Estate Development, Multi-Investment and
Industrial Investment with losses of 0.21 percent, 0.32 percent and 0.35
percent respectively. The overall market breadth for the day was strongly
positive with 70 advancers against 51 decliners giving it an AD ratio of
1.3720.33, the Financial Transaction House (FTH) said in its daily market
commentary.
Commercial Bank of Qatar rose 1.3 percent, helping Doha's
index reach a 21-week high.
"Qatar is outperforming, led by banks, which have
very good valuations," said Rami Sidani, Schroders Middle East head of
investment. "Some Q3 results are expected soon from the banking and
petrochemical sectors which will impact the market."
The Qatari index rose 0.5 percent to 7,638 points.
In Egypt, Talaat Moustafa, rose 2.5 percent, but pared
early gains after Egypt's Cabinet delayed a meeting that was expected to
resolve a land dispute involving the firm. The country's index hit a four-month
high 6,673 points.
The Kuwaiti index ended flat at 6,821 points.
The Omani index slipped 0.02 percent to 6,419 points.
- With input from agencies
