* Dubai index tests major, long-term chart barrier
* A clean break would trigger major double bottom
* U.S. investment boosts OCI in Egypt
* A delisting of OCI would sap trading turnover
* Saudi labour policies slash construction firm's profit
By Nadia Saleem
DUBAI, Jan 20 Dubai's bourse rose to a 32-month
closing high in heavy trade on Sunday as it tested, but failed
to break, long-term technical resistance. Most regional markets
The Dubai index, buoyed by a budding recovery in
the real estate market and the belief that the emirate has
largely put its 2009-2010 corporate debt crisis behind it,
climbed as high as 1,803 points before it finished up 1.0
percent at 1,792 points, its highest close since April 2010.
The index was testing major chart resistance between 1,778
points, the 2012 high hit in March last year, and the October
2010 peak of 1,793 points.
Any clean break - a close above that area for at least two
successive sessions -- would trigger a major double bottom
formed by the 2012 and early 2011 lows, with a technical target
above 2,200 points in coming months.
"The market has the potential to break the 1,800 level,
which was tested today - the volumes were significant and a
continuation on last week's volumes," said Musa Haddad, head of
investment advisory services at National Bank of Abu Dhabi.
Investors may decide to book gains in the next few sessions,
but this could merely allow medium- and long-term investors to
buy at lower prices.
"This is a huge recovery for the Dubai market, heading to
2,200 to 2,400 points," added Haddad. "The market has been
basing out for a few years and this is a bullish confirmation on
the Dubai market, which should continue for a couple of years."
The market traded 446 million shares during the day, a
little below the peak of 505 million shares traded on Jan. 9,
which was the highest in about a year.
Bellwether Emaar Properties rose 4.1 percent,
National Central Cooling (Tabreed) added 2.4 percent
and Union Properties climbed 6.3 percent
Abu Dhabi's measure gained 0.6 percent to its highest
close since November 2010. Heavyweights First Gulf Bank
and Etisalat climbed 2.1 and 0.1 percent respectively.
In Egypt, Orascom Construction Industries (OCI)
helped lift Cairo's bourse after U.S. investors committed to
invest $1 billion in its unit OCI NV. Shares in OCI rose 1.7
percent to close at 271.70 pounds ($41.15).
OCI NV said on Friday it had launched an exchange offer to
acquire all of the outstanding Global Depositary Receipts of
parent OCI in exchange for ordinary shares in OCI NV. It also
offered to acquire all of OCI's ordinary shares in exchange for
OCI NV shares or 280 pounds in cash per share.
"Should more than 95 percent of investors in OCI accept the
offer, the company would then have the option to force the
remaining shareholders to sell and to delist OCI in Cairo - we
think this is the likeliest option," NBK Capital said in a
research note, adding that the fair value of OCI shares was
close to the cash offer price.
Delisting OCI would take a chunk of trading volume off the
Egypt exchange, where the company accounts for about 25 percent
of total market capitalisation. "The loss in liquidity will be
quite severe," NBK added.
Egypt's index closed 0.4 percent higher, up 4.1
percent so far in January. The Egyptian pound continued
sliding to fresh record lows against the U.S. dollar on Sunday
but many investors are still betting Egypt can avoid an outright
currency collapse, so the depreciation has not hurt stocks.
Elsewhere, shares in Saudi construction firm Abdullah A. M.
Al Khodari Sons Company plunged 8.3 percent to their
lowest close in January.
The construction firm said late on Saturday that its
fourth-quarter net profit dropped 50 percent, mainly because of
higher costs. It cited government policies to encourage more
hiring of local citizens rather than foreigners, such as a quota
system for employees.
Costs may rise further after the labour ministry said in
November that companies employing more expatriate workers than
Saudis would be charged a fee of 2,400 riyals ($640) a year for
each excess foreigner.
Saudi Arabia's measure ticked up 0.06 percent.
* The index rose 1 percent to 1,792 points.
* The index gained 0.6 percent to 2,782 points.
* The index advanced 0.4 percent to 5,685 points.
* The index edged up 0.06 percent to 7,054 points.
* The index climbed 0.3 percent to 6,158 points.
* The index edged up 0.04 percent to 8,625 points.
The index advanced 0.07 percent to 5,811 points.
* The index eased 0.06 percent to 1,081 points.