MIDEAST STOCKS-Saudi hits fresh 41-mth high; most markets halt rally

DUBAI/CAIRO Mon Feb 27, 2012 9:32am EST

DUBAI/CAIRO Feb 27 (Reuters) - Saudi Arabia's bourse extended its rally on Monday and trading value hit a new high amid a trend of investment shift to equities, while most regional markets fell in profit-taking.

The kingdom's index rose 0.9 percent to its highest close since September 2008.

Total traded value jumped to 12.2 billion riyals ($3.25 billion), a new high in the last four years as investors pour money into equities from other asset classes on growing confidence.

"If there is a correction, the question is where would the money go? There are no clear alternatives," said Asim Bukhtiar, head of research at Riyad Capital. "Yield and bank interest rates are low. Equities seem to be the way to go."

Banks advanced, with Samba Financial Group gaining 1.5 percent, Riyad Bank up 1.6 percent and Arab National Bank climbing 3.9 percent.

"Valuations have started to run up especially in banks. You have to be more selective, focus on quality stocks that have strong balance sheets," Bukhtiar added.

Elsewhere, UAE's markets ended mixed with Dubai's rally faltering as investors booked profits.

Aramex was among the biggest losers, falling 3.1 percent, on the emirate's index after the logistics firm cut its proposed cash dividend for 2011. It proposed a 5 percent cash dividend for 2011 at 5 fils, down from 7.5 fils a year ago.

"Today's profit-taking is driven by Aramex, which cut its dividend, but foreigners are not concerned with that," said Julian Bruce, EFG-Hermes director of institutional equity sales.

"For local investors it's a key measure for investing and in light of other companies increasing dividends, you have a negative reaction, usually a trigger for the broader market," Bruce said, adding the UAE market activity is predominantly driven by retail investors.

Dubai's benchmark fell 1.3 percent, down from Sunday's 10-month high

Investors also booked profits in stocks that rallied sharply in recent sessions. Shuaa Capital dipped 5.3 percent, Union Properties fell 6 percent and Gulf Navigation shed 5.6 percent.

Abu Dhabi's benchmark ticked up 0.1 percent to its highest close since September 2011. First Gulf Bank was the main support, rising 2.4 percent.

In Egypt, the main index slipped 1 percent from Sunday's seven-month high as investors booked recent gains.

Commercial International Bank fell 3.1 percent in heavy trade.

"Today we are seeing a lot of selling by foreign investors taking profits after the excessive buying we had on Sunday," said Mohamed Kotb of Naeem Brokerage.

But real estate stocks extended gains with Palm Hills up 4.4 percent.

"Real estate firms are up as speculation continues that a deal could be reached soon with a Gulf firm taking over one of Egypt's big real estate companies," Kotb said, although he added that no firm has confirmed any such negotiations.

Orascom Telecom Media and Technology fell 3.4 percent after it gained 3.5 percent on Sunday. OTMT has been in talks for weeks to sell most of its stake in mobile phone venture Mobinil to its partner France Telecom.

In Qatar, the index slipped 0.2 percent, easing from Sunday's six-week high.

Industries Qatar (IQ) led losers, falling 0.8 percent from Sunday's nine-month closing high. Interest in energy companies is muted after Qatar Petroleum said it was looking to raise domestic gas prices for feedstock gas.

Qatar Insurance dipped 2 percent, United Development fell 2.4 percent and Qatar Navigation shed 1.1 percent.

MONDAY'S HIGHLIGHTS

SAUDI ARABIA

* The index gained 0.9 percent to 7,150 points.

DUBAI

* The index fell 1.3 percent to 1,654 points.

ABU DHABI

* The index advanced 0.1 percent to 2,575 points.

EGYPT

* The measure slipped 1 percent to 5,218 points.

QATAR

* The benchmark dipped 0.2 percent to 8,758 points.

OMAN

* The index climbed 0.5 percent to 5,747 points.

BAHRAIN

* The measure climbed 0.2 percent to 1,146 points. (Editing by Firouz Sedarat)

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