* Qatar rises 2.6 pct, its biggest gain since Sept
* Dubai up for 2nd day since Tuesday's 6-wk low
* Kuwait in doldrums as local day traders switch to other
* Saudi remains near 6-yr high, but earnings may prove a
By Matt Smith
DUBAI, May 22 Qatar's index ended a
six-session losing streak to rebound from a three-week low on
Thursday as investors bought back sold-off mid-cap stocks, while
other Middle East markets were mixed.
Doha rose 2.6 percent to 13,008 points. It had slumped since
May 13's all-time high, but Thursday's increase - its largest in
eight months - puts it 1.3 percent below that milestone.
Vodafone Qatar and Islamic lender Masraf Al Rayan
accounted for about half of all shares traded on the
index. They climbed 2.9 and 3.8 percent respectively.
Qatar and Dubai, which hit a six-year high earlier
this month, are the Gulf's top performing markets in 2014.
That surge led Credit Suisse to cut its rating on United
Arab Emirates' markets to underweight from neutral, also
reducing Qatar to neutral from overweight.
"This is more of a 3-6 month view - I still see significant
long-term value, especially in the UAE," said Fahd Iqbal, head
of Middle East research at the Swiss investment bank.
"But in the short term, valuations have gotten a bit
expensive, especially in the UAE. Flows in the UAE were also
increasingly speculative and there's anecdotal evidence of
substantial leverage in the system too."
Dubai's measure rose 0.3 percent, up for a second day from
Tuesday's six-week low and its smallest one-day move since May
14 as volatility declined ahead of a three-day weekend.
The benchmark has tripled since the start of 2013, while UAE
corporate earnings are still bottoming out following Dubai's
debt restructuring, a housing price crash and the global
"Forward earnings forecasts in the UAE only hit the bottom
in 2012 - Qatar, Saudi and the rest of world bottomed out in
2009 - so there's still a long way to go. The quality of UAE
earnings is now much better than they used to be," said Iqbal.
In Kuwait, day traders have largely abandoned local stocks
to speculate on Gulf markets such as those in the UAE and Qatar,
said Fouad Darwish, Global Investment House head of brokerage.
That has led to a steep drop in traded value, which Darwish
estimates has fallen by about half this year, as well as the
divergent performance of Kuwait's equity benchmarks.
Kuwait's broader price index fell 0.4 percent and is
down 2.7 percent in 2014. The blue chip index dropped
0.9 percent, but is up 10.8 percent this year.
Retail investors typically trade small-cap stocks that have
a low free float and so are easier to move, while institutions
usually only target heavyweight names.
"There's been a reasonable influx of foreign institutions
this year and retail investors are slowly coming back - I expect
there will be a rally," said Darwish. "For the Gulf as a whole,
forecasts at a macro level look favourable for improving company
earnings and government spending."
The economies of the six Gulf Cooperation Council countries
are forecast to grow between 3 and 6.1 percent in 2014,
according to a Reuters poll of economists.
Saudi Arabia's index slipped 0.2 percent, within 0.7
percent of May 14's six-year high, but first-quarter results
from banking and petrochemical companies were unimpressive and
with these two sectors accounting for a large proportion of
combined earnings, the main share index could come under
pressure, analysts said.
* The index rose 2.6 percent to 13,008 points.
* The index rose 0.3 percent to 4,864 points.
* The index fell 0.4 percent to 7,347 points.
* The index fell 0.2 percent to 9,751 points.
* The index climbed 2 percent to 4,926 points.
* The index rose 1.2 percent to 8,728 points.
* The index climbed 0.5 percent to 1,459 points.
* The index fell 0.2 percent to 6,744 points.
(Editing by David French)