Gulf shares rise on Fed bailout plan

Dubai: Arabian Gulf shares advanced as the US government announced a plan to buy $700 billion (Dh2.57 trillion) in bad mortgage investments from financial companies and after global markets rallied late last week.

US stocks surged late last week in the biggest two-day global rally in 38 years as the government announced plans to purge banks of bad assets and crack down on speculators who drove down shares of financial companies. The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets.

The Kuwait Investment Authority may inject as much as 1 billion dinars (Dh13.76 billion) into Kuwait's stock market to alleviate recent declines, Asharq Al Awsat reported on Sunday, citing unidentified officials.

The Kuwaiti government last week urged the KIA, the country's $250 billion sovereign wealth fund, to infuse 300 million dinars into Kuwait's stock market, which has seen shares lose 12 billion dinars in value so far this month, the newspaper said.

"Real estate stocks are reacting because they are the most volatile and liquid and were most hit as foreign investors withdrew when global markets plummeted earlier this month,'' said Sharif Abdul Khalek, regional sales executive at Beltone Securities Brokerage in Dubai.

Emaar Misr for Development SAE, a unit of Emaar, will invest 12 billion Egyptian pounds ($2.1 billion) in a luxury real estate project in Cairo, Al Alam Al Youm reported on September 18, citing the company's Chief Executive Officer Sameh Mohtadi.

Zain soared 7.3 per cent to 1,760 fils, its largest advance since November 2005. The Kuwaiti phone company with operations in 22 Middle Eastern and African countries said it raised $4.49 billion through a capital increase in which 99 per cent of its shareholders subscribed.

Oman's Muscat Securities Market 30 Index rose 4.3 per cent, its largest gain since November 2000. Qatar's Doha Securities Market Index surged 7.9 per cent, while the Bahrain All Share Index added 1.1 per cent. Saudi Arabia's Tadawul All Share Index declined 0.6 per cent, ending two days of advances.

Al Mazaya Holding Co. climbed 8.8 per cent to 740 fils. The Kuwait-based property developer said it plans to set up two new units in Bahrain and Ajman.

Gulf General Investment Co. added 7.2 per cent to 9.7 dirhams, ending two days of declines.