Gulf shares gain ground as oil prices hit new high

Dubai: Gulf shares rallied on Tuesday as investors speculated the region's economies will benefit from record oil prices.

In the UAE, however, the Abu Dhabi Securities Exchange General Index retreated 0.6 per cent, while the Dubai Financial Market General Index fell 0.1 per cent.

Dubai Islamic Bank PJSC lost 2.5 per cent to Dh8.98. Shares in the lender were downgraded to "neutral" from "buy" at Merrill Lynch & Co.

First Gulf Bank gained 1.5 per cent to Dh23.35. Shares in the Abu Dhabi-based lender were rated "buy" in new coverage at Merrill Lynch, which set its price estimate at Dh30.50.

Elsewhere in the region, Industries Qatar and Saudi Basic Industries Corp. paced the gain as crude traded above $127 a barrel. Commercial Bank of Qatar QSC rose for the first time in four days after shareholders approved a rights offer. Kuwait Invest Co. Holding KSCC jumped to the highest in almost four months after saying quarterly profit more than doubled. Savola Al Azizia United Co. climbed after reports that it was planning to make acquisitions in Turkey.

On the rise

Qatar's Doha Securities Market Index rallied 1.7 per cent to 12,289.40, the highest close since November 2005. The Kuwait Stock Exchange Index added 0.5 per cent, while Saudi Arabia's Tadawul All Share Index advanced 0.4 per cent, ending three days of losses.

"Foreign investors are building positions as Gulf economic growth is expected to be helped by high oil prices," Ahmad Karim, senior broker at Global Investment House, said yesterday.

Qatar's economy will grow 10.3 per cent in 2008, while Saudi Arabia's will expand 4.9 per cent, according to the median estimate of seven economists polled by Bloomberg in December. Oil and gas revenue made up 50 per cent of Saudi Arabia's gross domestic product in 2007.

Industries Qatar rallied four per cent to 188.8 Qatari riyals, the highest since April 2005. Saudi Basic, known as Sabic, added 1.1 per cent to 140.5 Saudi riyals. The world's biggest chemical maker by market value appointed Charlie Crew as chief executive officer and president of Sabic Innovative Plastics.

Commercial Bank of Qatar rose 1.2 per cent to 170.8 riyals. The country's second-biggest bank said it received approval for the sale of 24 million shares to existing shareholders and to sell global depositary receipts.

Kuwait Invest jumped 4.6 per cent to 460 fils, the highest close since January 27. The investment company said first-quarter net income more than doubled to 1.6 million Kuwaiti dinars ($6 million), according to a statement posted on the website of the Kuwaiti bourse on Tuesday.