Middle East markets: Dubai index hits eight-week high

Dubai's index hit an eight-week high on Tuesday on optimism following increased likelihood of UAE bourses gaining emerging market status, while Egypt fell for a fourth day on concerns over the economy. The United Arab Emirates regulator said on Monday bourses would launch a new settlement system on April 28, a key step that will bolster the Gulf state's chances of earning MSCI emerging market status.
The index rose 1.1 percent to its highest close since February 16. Emaar Properties gained 0.6 percent and Emirates NBD climbed 1.4 percent. Analysts say large cap stock will be in focus as they stand to be the main beneficiaries of inclusion in the MSCI index. "People are anticipating the market will be included in the MSCI index so we're seeing a lot of buying across the board," said a Dubai-based trader on condition of anonymity.
"Retail buyers are all over Arabtec and other cheaper stocks as well." Arabtec surged 7.1 percent in heavy trading. Egyptian shares fell for a fourth day, with the index losing 1.4 percent as local investors took stock of economic problems after initial exuberance last month, traders said. Among blue chips, Commercial International Bank fell 1.2 percent, EFG-Hermes lost 0.5 percent and Orascom Construction eased 0.4 percent.
"The market recovered too fast in a short time span. Now people are digesting recent economic news," said Osama Mourad of Arab Finance Brokerage. Among announcements in the last few days hurting the market were a $3 billion decline in foreign reserves in March, an increase in annual inflation in March to an 11-month high and a new string of businessmen whose assets were frozen, he said.
Qatar's index slipped 0.7 percent, snapping a five-day rally as investors booked profits, but the medium-term outlook remains positive, analysts said. Industries Qatar fell 0.7 percent and Qatar Telecom dropped 0.5 percent. "By the end of Q1, I think the 9,200 levels are quite achievable," said a Qatar-based trader who asked not to be identified.
Saudi Arabia's index fell 0.3 percent, the fourth loss in seven session as investors booked profits in petrochemicals following a month-long index rally. "We saw the stocks weak in blowout numbers, that is a sign that they have been run up greatly," said a Riyadh-based trader who asked not to be identified.
The petrochem index slipped 0.7 percent with heavyweights Saudi Basic Industries Corp and Saudi Arabian Fertilisers Co falling 0.2 and 0.8 percent respectively. Abu Dhabi's index rose 0.5 percent to a month-high. Blue chips gained with Aldar Properties adding 3.3 percent. Heavyweights Etisalat and National Bank of Abu Dhabi climbed 0.5 percent each. The new settlement system announced "shows the exchanges are on the right track and they have a better chance to meet the deadline", said Matthew Wakeman of EFG-Hermes. Oman's index hit a two-week high, rising 0.7 percent. Renaissance Services jumped 4.3 percent as foreign investors bought in after a Deutsche Bank buy recommendation.