Most Gulf marts edge up on post-Ramadan rally hopes

07/09/2010 00:00 AST

National Bank of Kuwait (NBK) hit a 23-month high yesterday after a local newspaper report said an investor from the UAE was interested in buying a stake in the lender.

Most Middle East markets rose, extending gains as investors bet on a sustained post-Ramadan rally.

Dubai’s index climbed 2% to 1,569 points. Abu Dhabi’s index rose 0.4% to 2,517 points. Saudi Arabia’s measure rose 0.6% to 6,306 points.

Kuwait’s benchmark climbed 0.2% to 6,728 points. Oman’s index edged up 0.08% to 6,282 points. Bahrain’s measure rose 0.6% to 1,423 points.

NBK climbed 5.6% to its highest finish since October 12, 2008. The lender’s shares are up 17% since a newspaper report on August 19 said at least two NBK shareholders had received offers to sell a stake in the bank.

Islamic lender Boubyan Bank, in which NBK holds a 40% stake, according to Reuters data, rose 3.5%.

Dubai’s index hit a three-month high. Emaar Properties climbed 3.1%, Arabtec gained 4.7% and Dubai Financial Market added 5.3%. This trio accounted for two-thirds of index volumes.

“There is a concentration on the bluechips and high beta names like DFM, Emaar and Arabtec,” said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments. “Investors are interested in these stocks after they were severely over-sold going into Ramadan.”

The benchmark climbed 2% as volumes hit a two-month high, doubling Sunday’s total.

“These gains are sustainable - we were always talking about a rush at the end of Ramadan from investors taking positions ahead of a likely rally after Eid,” added Shurrab. “International sentiment has helped us and a positive open to European markets brought in extra volumes to our markets.”

Saudi Arabia’s bourse reached a four-week high as bullish investors bet on a sustained US economic recovery.

“The US will have a slowdown, but it won’t sink into a double dip recession for the time being at least and that has given confidence to our markets,” said Shakeel Sarwar, Sico investment bank head of asset management.

Reuters