MIDEAST STOCKS-Egypt surges ahead of voting; Gulf mkts rise

DUBAI Wed Dec 19, 2012 9:09am EST

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DUBAI Dec 19 (Reuters) - Egypt's bourse extended gains on Wednesday, as Arab investors continued to buy into risk ahead of a second round of voting on the new constitution, while most Gulf markets also gained.

Cairo's benchmark index rose 1.9 percent to finish at 5,420 points, back to the pre-crisis levels of late November when the market plunged because of the controversy over President Mohamed Mursi's moves to award himself wider powers and push through a new constitution.

Small-caps dominated trading with Palm Hills Development rising 3.7 percent, Citadel Capital up 6.3 percent and El Saeed Contracting gaining 2.5 percent.

Arab investors attracted by cheaper valuations and non-Arab foreigners have been the main buyers, against Egyptian sellers.

"The market will continue moving upwards to reach close to 5,600 levels, where I'm expecting the bears to appear again and lead the market to decline towards 5,200-5,100 levels," said a Cairo-based technical analyst. "I don't think that we are going to break above the current resistance levels by the end of this year."

Sentiment is weaker in the country amid continued protests. Egyptian Islamist groups are planning a mass protest in Alexandria on Friday, a move that will raise tensions a day before the final stage of a referendum on a new constitution that opponents say is too Islamist.

In Saudi Arabia, the benchmark resumed a rally, gaining 0.4 percent to its highest close since Nov. 11. The market has gained for 13 of the last 16 sessions as bargain hunters lifted it from a 10-month low.

Banks and petrochemical stocks supported gains with Bank Albilad surging 8.2 percent. Samba Financial Group gained 2 percent and Al Rajhi Bank rose 0.8 percent. The petrochemical index added 0.3 percent.

Market sentiment is buoyed by expectations the 2013 budget, to be announced before year-end, will boost government spending.

Elsewhere, Qatar's bourse made its biggest one-day gain in three months on a technical breakout, while banks helped lift Oman's market to a near six-week high.

Heavyweight Industries Qatar advanced 1.1 percent and Qatar Electricity and Water climbed 0.9 percent. Of the 20 stocks on the main index, 17 gained.

Doha's index rose 0.7 percent to 8,407 points, its largest daily gain since Sept. 12 and highest finish since Nov. 28.

"It's a technical bounce more than anything else - the market was hovering above the 8,300 level, which is a very strong support and wasn't breached," said a Doha-based trader who asked not to be identified. "The next target is 8,450."

In Muscat, the index rises 0.4 percent to finish at 5,696 points, its highest close since Nov. 11.

The index is close to a resistance level of 5,700, with the next target at 5,750.

Bank Dhofar and HSBC Oman rose 1.4 and 1 percent respectively. Oman International Development and Investment added 1.9 percent.

"The market is rallying on a mixture of relatively-improving fundamentals, allocations ahead of the new year and dividend yields," said Kanaga Sundar, Gulf Baader Capital Markets head of research.

There is increased buying interest in banks as attractive valuations draw local and international institutions, he adds.

In the UAE, bluechips help Dubai's index rise 0.1 percent.

Emaar Properties and carrier Air Arabia added 0.5 and 1.2 percent respectively. Builder Arabtec climbed 1.3 percent.

WEDNESDAY'S HIGHLIGHTS

EGYPT

* The index rose 1.9 percent to 5,420 points.

SAUDI ARABIA

* The index climbed 0.4 percent to 6,889 points.

QATAR

* The index advanced 0.7 percent to 8,407 points.

OMAN

* The index advanced 0.4 percent to 5,696 points.

DUBAI

* The index gained 0.1 percent to 1,592 points.

ABU DHABI

* The index ticked up 0.06 percent to 2,613 points.

KUWAIT

* The index edged up 0.02 percent to 5,987 points.

BAHRAIN

* The index slipped 0.2 percent to 1,047 points.

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