[2008-01-07]  Gulf Shares Gain on Earnings Outlook; Egypt's CASE 30 Climbs
Persian Gulf shares advanced on speculation of fourth-quarter earnings growth. Saudi Basic Industries Corp., Aabar Petroleum Investments Co. and Gulf Cable and Electrical Industries Co. led the gains.

Egypt's CASE 30 Index rose to a record as Gulf investors, flush with petrodollars from record oil prices, bought shares.

In the Persian Gulf, ``expectations of strong fourth- quarter earnings and dividends are helping the stock markets'' as are low interest rates, Rami Sidani, vice president for asset management at Shuaa Capital PSC, said in an interview today. ``People are realizing that putting their money in banks is eroding their purchasing power as deposits earn between 4 to 4.5 percent, while inflation is at 10 percent.''

Most Gulf Arab countries follow the U.S. Federal Reserve's interest-rate policy to maintain their currency pegs to the dollar. The Fed has been cutting rates to stop the credit squeeze from curtailing economic expansion. These lower rates, during oil-driven economic growth in the Gulf, are fueling inflation in the region. Kuwait dropped the dollar peg in May.

Saudi Arabia's Tadawul All Share Index added 2.6 percent to 11,712.58, bringing the three-day gain to 8 percent. The measure surged 41 percent last year. The Abu Dhabi Securities Market Index climbed 1.6 percent today, while the Kuwait Stock Exchange Index increased 1.4 percent.

The U.A.E.'s real gross domestic product expanded at 8.9 percent in 2006. Saudi Arabia's economy grew at 4.3 percent. In the U.A.E. annual inflation reached a record 9.3 percent in 2006, while Saudi Arabia's inflation accelerated to 5.4 percent in October, also a record.

Oil Climbs

Crude oil rose to a record $100.09 a barrel Jan. 3 on a report showing that U.S. inventories declined for seven consecutive weeks. Oil for February delivery fell 1.3 percent to settle at $97.91 a barrel on the New York Mercantile Exchange Jan. 4. The contract rose 2 percent last week.

Oil may rise in the coming week because of falling U.S. inventories and a weakening dollar, according to a Bloomberg survey. Fourteen of 27 analysts surveyed, or 52 percent, said oil prices will rise through Jan. 11. Eleven of the respondents, or 41 percent, said prices will fall, and two predicted little change.

Sabic, the world's biggest chemicals maker by market value, jumped 5.7 percent to 216.5 riyals today. Aabar, the Abu Dhabi- based oil and gas explorer, added 3 percent to 4.09 dirhams.

Egypt Gains

Gulf Cable rose 2.9 percent to 3,500 fils. The board of the Kuwaiti maker of electrical equipment recommended paying a cash dividend of 50 fils per share and distributing 30 bonus shares for every 100 held, according to a statement posted on the Web site of the Kuwaiti bourse.

In Egypt, the CASE 30 Index added 1.5 percent to 10,827.98 gaining for a sixth day. The measure, up 51 percent in 2007, has climbed 2.7 percent this year.

``A lot of institutional investors tend to build up positions early in the year,'' said Mohamed Radwan, head of international sales at Pharos Holding for Financial Investments in Cairo. ``Egypt's gain this year also comes on the back of the rally in the Gulf region on higher oil prices,'' and as Gulf investors buy stocks here.

Telecom Egypt, the biggest fixed-line telephone company in the Middle East, jumped 4.6 percent to 22.58 Egyptian Pound.

In the United Arab Emirates, the Dubai Financial Market General Index rose 1.7 percent to 6,190.45, its highest close since April 13, 2006. Emaar Properties PJSC, the largest publicly traded real-estate developer in the Middle East, advanced 2.3 percent to 15.7 dirhams, also an April 2006 high.

Oman Record

Arabtec Holding PJSC climbed 2.5 percent to 9.8 dirhams. The company building the world's tallest tower in Dubai bought 55 percent of Gulf Steel Industries FZC, a leading steel fabrication company in the U.A.E.

Tamweel PJSC, the U.A.E's second-biggest mortgage provider by market value, increased 1.3 percent to 7.12 dirhams. The company plans to expand into two new markets in 2008 after entering Saudi Arabia and Egypt last year, Business 24/7 reported without identifying the two markets.

Qatar's Doha Securities Market Index added 1.1 percent. United Development Co. jumped 7.4 percent to 41.9 riyals. The Qatari property developer building the ``Pearl-Qatar,'' a man- made island project in Doha, may raise the foreign ownership limit on its shares to 49 percent from 25.

Oman's Muscat Securities Market 30 Index climbed 2.6 percent to 9,854.02, a record, Bloomberg data show. The Bahrain All Share Index gained 0.1 percent.


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