MIDEAST STOCKS-Qatar makes fresh breakthrough; other mkts recover
* Qatar hits new all-time highs, closing and intra-day
* Driven by govt spending, MSCI hopes, catch-up with Dubai
* Arabtec lifts Dubai but market remains volatile
* Aldar results boost Abu Dhabi
* Food maker Wafrah tops Saudi turnover ahead of AGM
By Olzhas Auyezov
DUBAI, May 12 (Reuters) - Qatar's bourse continued to conquer new highs on Monday while markets in the United Arab Emirates and Saudi Arabia recovered from the previous day's profit-taking.
The Doha benchmark rose 0.6 percent to a new all-time closing high of 13,067 points. The measure closed just below the 2005 intra-day high of 13,069 but set a new intra-day peak of 13,080 points earlier in the day.
Ali Adou, portfolio manager at The National Investor, said the two major factors driving growth in Qatar's market were valuations and the performance of the UAE markets, especially Dubai, which this month will, together with Qatar, move to the emerging market index compiled by MSCI.
Although Qatar trades close to the Middle East and North Africa (MENA) average in terms of price-to-earnings ratio, the massive spending planned by its government could justify higher multiples, Adou said.
Qatar plans to boost government spending by 18 percent to 210.6 billion riyals ($57.8 billion) in the 2013/14 fiscal year as it implements a large-scale infrastructure building programme in preparation to host the 2022 World Cup soccer tournament.
And, since MSCI announced the index upgrade last June, Dubai has outperformed Qatar by about 86 percent, he said, prompting a catch-up move.
MSCI will announce the names of stocks from both countries that it will include in the index late on Wednesday and the adjustment takes effect at the end of this month.
"I think the international investors are positioning themselves in Qatar (ahead of the MSCI upgrade)," Adou said.
Dubai's bourse closed up 1.5 percent after diving as low as 2.5 percent early in the session. Builder Arabtec Holding was both the most volatile stock and the main support, rising 7.8 percent after dropping 8.5 percent during the day.
Trading volume in Arabtec was higher on upswings, though, and more than doubled compared with Sunday.
Shares in another Dubai-based construction company, Drake and Scull, fell 2.3 percent after the firm missed analysts' expectations with a 27.1 percent decline in first-quarter net profit, citing unforeseen delays to two major projects in Saudi Arabia.
Abu Dhabi's bourse edged up 0.4 percent. Developer Aldar Property was one of the main supports as it gained 3.9 percent after posting a three-fold increase in first-quarter profit.
Saudi Arabia's index climbed 0.2 percent. Food manufacturer Wafrah topped the trading volume, jumping 8.0 percent after it called an annual meeting on May 14 to discuss last year's profit distribution.
* The index rose 1.5 percent to 5,214 points.
* The index edged up 0.4 percent to 5,007 points.
* The index climbed 0.6 percent to 13,067 points.
* The index added 0.2 percent to 9,776 points.
* The index edged up 0.2 percent to 8,244 points.
* The index slipped 0.3 percent to 7,390 points.
* The index rose 0.4 percent to 1,472 points.
* The index slid 0.5 percent to 6,746 points. (Editing by)
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