February 1, 2012 / 3:01 PM / 8 years ago

MIDEAST STOCKS-Dubai at 4-mth high on Q4 optimism, Egypt extends gains

DUBAI, Feb 1 (Reuters) - Dubai’s bourse climbed to a four-month high on Wednesday, as hopes of strong earnings and rising European stocks lifted sentiment, and Egypt’s market extended a rally on optimism about the political environment.

Dubai’s real estate stocks led the rally, helping the emirate’s bourse gain 1.2 percent to end at its highest close since Sept 22.

“There is a belief that blue chips real estate firms like Emaar will report good fourth-quarter results,” said Saad al-Chalabi, technical analyst and trader at Al Ramz Securities in Abu Dhabi.

Builder Arabtec registered the biggest gains, climbing 5 percent to a near 2-year high. Emaar Properties gained 2.2 percent.

Most of the big firms in the United Arab Emirates are yet to report fourth-quarter earnings.

“The macro environment has also helped the UAE markets today. There is optimism and economic situation favours equities,” said Chalabi.

European stocks jumped and the euro recovered from week lows after official data showed an unexpected expansion in China’s powerful factories in January and the first growth in German manufacturing in four months.

In Egypt, the main index gained 0.9 percent, extending a rally this year that has taken it up 29 percent after the benchmark slumped by almost half in 2011.

“Foreign buyers are now interested to invest in the Egyptian market, especially after the elections to parliament ended well, which made them feel good about progress in the political system,” said Ahmed Khalil, a trader at Cairo Capital Securities.

Khalil says concern over the potential effect of ongoing street protests in Cairo was receding.

Other analysts had a more cautious take on the Egyptian market’s sharp gains this year.

They said Egyptian investors who are unable to shift large amounts of money out of the country to safer locations have been buying local equities as an alternative.

Ezz Steel, which reported a leap in third-quarter net income on Tuesday, was the biggest gainer, up 3.7 percent.

Orascom Telecom Media climbed 5.5 percent and real estate group Palm Hills surged 7.2 percent.

In Abu Dhabi, the index climbed 0.5 percent to a seven-week high, helped by National Bank of Abu Dhabi that gained 1.4 percent, a day after proposing a 30 percent cash dividend.

“Defensive, high dividend yield stocks will continue to outperform the market, such as banks, airlines and utilities,” says Marwan Shurrab, vice-president at Gulfmena Investments.

In Saudi Arabia, the index rose 0.6 percent to a new eight-month high, as developer Dar Al Arkan surged 8.5 percent, also ending at an 8-month high.

“There is a lot of interest in the company among institutions and local investors,” said a Saudi-based trader, who did not want to be named.

Dar Al Arkan’s fourth-quarter profits slipped 12.3 percent but the earnings beat analyst forecasts.

Blue chip firms were little changed, with Saudi Basic Industries Corp. (SABIC) slipping 0.5 percent and Al Rajhi Bank gaining 0.4 percent.

DUBAI

* The index gained 1.2 percent to 1,454 points.

EGYPT

* The measure rose 0.9 percent to 4,688 points.

ABU DHABI

* The index climbed 0.5 percent to 2,466 points.

SAUDI ARABIA

* The index climbed 0.6 percent to 6,663 points.

QATAR

* The benchmark inched up 0.03 percent to 8,570 points.

KUWAIT

* The measure fell 0.2 percent to 5,856 points.

BAHRAIN

* The measure dropped 0.3 percent to 1,137 points.

OMAN

* The index eased 0.01 percent to 5,561 points. (Additional reporting by Yasmine Saleh in Cairo; Editing by Firouz Sedarat)

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