MIDEAST STOCKS-Saudi snaps pre-budget rally; Egypt highest since political crisis

DUBAI Tue Dec 18, 2012 9:20am EST

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DUBAI Dec 18 (Reuters) - Saudi Arabia's bourse snapped a five-session winning streak on Tuesday as investors booked gains in petrochemical and insurance stocks, while most other regional markets rose.

The kingdom's index slipped 0.2 percent, easing from Monday's five-week high. Saudi Arabia's index rallied in recent sessions as bargain hunters lifted the market from an 11-month low hit in late November.

Expectations for increased spending that could be announced in the Saudi budget for 2013 during coming weeks have helped to spur buying.

Petrochemical stocks declined with Saudi Basic Industries Corp (SABIC) and Saudi Kayan Petrochemical slipping 0.3 and 0.4 percent respectively.

Dallah Healthcare Group, however, jumped 6.5 percent in its second session of trading, showing retail investors remain willing to trade fast-moving stocks aggressively. Dallah climbed 51.3 percent on its Monday debut.

"For the last two weeks or so we had momentum because of two things: a rebound from the recent drop, and expectations for the Saudi budget, which are very positive," said Faisal al-Othman, portfolio manager at Riyadh-based Arab National Bank.

"For the short term, the market will stop (around current levels) for a correction."

EGYPT

Elsewhere, Arab investors helped to lift Egypt's index to a four-week high. It rose 0.6 percent, extending 2012 gains to 47 percent and reaching its highest level since the market plunged in late November because of the controversy over President Mohamed Mursi's moves to award himself wider powers and push through a new constitution.

The market has now regained the vast majority of the losses caused by the political uproar, suggesting some investors do not think the long-term investment environment has been seriously damaged.

Palm Hills Development rallied 7.3 percent and was the most traded stock on the market. Large-caps were mixed, with Orascom Construction Industries slipping 0.8 percent and Telecom Egypt down 0.8 percent.

Arab investors were net buyers, while Egyptians and non-Arab foreigners were net sellers, according to bourse data.

"I wouldn't expect Egypt's market to be able to replicate this year's performance in 2013 because it started from a very low base, but volatility will always attract traders and volumes may improve rather than the index," said Mohammed Yasin, managing director of NBAD Securities in Abu Dhabi.

In the UAE, investors booked gains in Dubai's blue chips, while Abu Dhabi's market ended flat as activity began to wind down ahead of the year-end.

Shares in Emaar Properties, which have been on a tear because of signs of a recovering real estate market, declined 0.8 percent, trimming 2012 gains to 43.2 percent. The emirate's index ended 0.1 percent lower, still up 17.4 percent so far this year but 10.6 percent below its March peak.

Some investors expect the market to pick early next year, backed by positive momentum in the property sector and banks heading towards a peak in their loan provisioning cycle.

"UAE markets will retain a positive tone until the finish of the year, given the overall expectation for equities in 2013," said Anastasios Dalgiannakis, institutional trading manager at Mubasher. "On that basis, I would expect more positive momentum."

Elsewhere, Qatar's index advanced 0.2 percent, up for a third day in the last seven sessions. Industries Qatar added 0.7 percent and Commercial Bank of Qatar rose 0.9 percent.

TUESDAY'S HIGHLIGHTS

SAUDI ARABIA

* The index declined 0.2 percent to 6,858 points.

EGYPT

* The index rose 0.6 percent to 5,321 points.

DUBAI

* The index slipped 0.1 percent to 1,589 points.

ABU DHABI

* The index ticked up 0.02 percent to 2,611 points.

QATAR

* The index gained 0.2 percent to 8,351 points.

KUWAIT

* The index climbed 0.5 percent to 5,985 points.

OMAN

* The index advanced 0.5 percent to 5,673 points.

BAHRAIN

* The index gained 0.2 percent to 1,049 points.

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