Oman International Bank surged to an 18-month high on Sunday over its merger talks with HSBC's Oman operations, and other Gulf bourses also advanced on hope that the European debt crisis would be resolved. OIB climbed 7.1 percent, reaching its highest value since March 31 last year.
HSBC Holdings and Oman International Bank are in discussions for a potential merger of HSBC'S Oman operations with the Gulf lender, OIB said on Thursday.
A source at the Omani bank told Reuters that HSBC is in talks to sell its Oman operations to OIB.
"We saw a very strong buying into OIB stocks today due to the announcement," said Adel Nasr, United Securities brokerage manager. "We believe this momentum will continue for the bank. The bank is changing its strategy and this will have a positive impact."
OIB shares accounted for more than half of the trading on Oman's bourse, which ended 0.5 percent higher. Other banks also advance with Bank Muscat gaining 0.6 percent. In the United Arab Emirates, Dubai's blue-chip firm Emaar Properties led the rally as traders were encouraged by a steady end to the trading week on global markets.
Emaar gained 0.8 percent, ending at a one-week high. Abu Dhabi's Aldar Properties gained 0.9 percent. However, volumes remained muted.
"Without a major value increase in the daily trading, it will be difficult to break the current range we entered last week," said Mohammed Yasin, CAPM Investment chief investment officer.
"What could change that is positive news from Europe, a major economic announcement or better-than-expected results from some major companies. Waiting for international investors to come and save our markets is unrealistic.
Saudi Basic Industries Corp (SABIC) advanced as investors expect positive third-quarter earnings from the company.
SABIC gained 1.7 percent, lifting the Saudi index by 0.3 percent.
"SABIC is advancing as speculation has already begun that the company will see good earnings this quarter," said Hesham Tuffaha, Bakheet Investment Group head of research.
Saudi Arabian Fertilisers Co (Safco) drops 0.5 percent, after gaining in early trade. Safco third-quarter net profit doubled after prices for its products rose globally.
"Safco already had a rally for the last three weeks," said Tuffaha.
"What we so today was expected and has been factored into the price."
Meanwhile, Egyptian traders snapped up battered stocks buoyed by reports that the government is negotiating financing packages to support the budget.
Orascom Construction Industries climbed 4.6 percent and Orascom Telecom Holding gained 3.2 percent.
"This is partly because prices have reached very attractive levels for investors to buy and also because there were several encouraging financial reports such as the one about Egypt renegotiating a loan with the International Monetary Fund," said Hisham Metwalli, trader at Arab Finance Brokerage.
The index gained 1.9 percent.
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