Gulf shares surge on bank stake purchase plans

Dubai: Gulf shares gained for a second day after the UAE made more funds available to local lenders and the US prepared to invest $125 billion in nine banks.

Dubai Islamic Bank PJSC, the UAE's biggest bank complying with Muslim banking rules, extended Monday's surge. National Bank of Abu Dhabi PJSC climbed the most since May 2005. Oman Telecommunications Co. SAOG, the sultanate's biggest phone company, rose for a fourth day.

Oman's Muscat Securities Market 30 Index climbed 8.4 percent.

"There has been a significant improvement in sentiment worldwide, and that's being reflected in our markets as well," said Ali Khan, head of equity trading at Dubai's Arqaam Capital Ltd. "I would be cautious in calling the bottom. There is still ongoing concern about liquidity and the future of the real-estate market."

Shares jump

The UAE government made another $19 billion available to local banks, taking the total money injected into the banking system to $33 billion in less than a month, WAM reported.

The US investment in nine of the nation's biggest banks, including Citigroup and Goldman Sachs Group Inc. would come after France, Germany, Spain, the Netherlands and Austria pledged 1.3 trillion euros ($1.8 trillion) to guarantee bank loans and take stakes in lenders. The Standard & Poor's 500 Index advanced 11.6 per cent on Monday. In Asia, the Nikkei 225 Stock Average jumped 14 per cent on Tuesday.

Dubai Islamic Bank soared 15 per cent to 5.94 dirhams, bringing the two-day surge to 32 per cent. National Bank of Abu Dhabi, the UAE's second-biggest lender by assets, added 9.8 per cent to 12.3 dirhams.

Omantel added 7.7 per cent to 1.949 rials, bringing the four-day advance to 25 per cent.

In Qatar, the DSM 20 Index soared 9.9 per cent, while Saudi Arabia's Tadawul All Share Index gained 7.6 per cent. The Bahrain All Share Index added 1.8 per cent. The Kuwait Stock Exchange Index declined 0.3 per cent.