STOCKS NEWS MIDEAST-Oman near-flat after budget; Bank Muscat up

0950 GMT - Anticipation of strong fourth-quarter earnings at

Bank Muscat lifts shares, outperforming the broader

index which ends near-flat, after bluechips come under selling

pressure.

Bank Muscat ends 1.1 percent higher, at 0.58 riyals, its

highest close since May 8.

"We witnessed some profit-booking on the bluechips, with the

exception of Bank Muscat. We believe Bank Muscat Q4 will be

good, and its usually the first in the sector to announce

earnings, and gives an indication for the rest of the banking

sector," says Adel Nasr at United Securities.

The index ends near flat at 5,766 points.

"I think the market will be back on track soon. We are

expecting results in the next 10-14 days, which will have a

positive impact, but the market is likely to stay neutral until

then," Nasr adds.

Elsewhere, Saudi shares extends Tuesday's gains. Brent crude

rose above $112 per barrel to hit a one-month high on Wednesday

as the U.S. Congress approved a deal to avert a fiscal crisis.

One regional trader said that the market is gearing up for

earnings season, which is supporting stocks across the board.

The index rises 0.6 percent to 6,899 points.

Other Gulf markets also rally on strong global cues.

Kuwait's benchmark advances 1 percent to 5,994 points

and Qatar's index climbs 0.8 percent to 8,429 points.

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0700 GMT - United Arab Emirates markets rise with gains

across the board as positive global sentiment lifts stocks, and

as property shares recover from losses on Monday in response to

the central bank's introduction of caps on mortgage loans.

Dubai's index rises 1.1 percent to 1,641 points and

Abu Dhabi's benchmark advances 0.8 percent to 2,652

points. Abu Dhabi is heading for a break of chart resistance

around 2,640 points, which was support in October and November,

and which the index tested and failed to break last week.

Bellwether Emaar Properties is up 1.3 percent and

contractor Arabtec also up 1.3 percent. Dubai

Financial Market stock advances 3.0 percent.

Analysts believe the mortgage loan caps may slow the real

estate sector's recovery but not end it, and could be positive

in the long term by reducing volatility. Also, there is doubt

over how strictly the rules will be enforced.

"There is good sentiment in the market; Saudi was up on

Tuesday, and there was good news from the U.S., which are the

main reasons we are seeing the upside today," says Marwan

Shurrab, vice president and chief trader at Gulfmena

Investments.

"For the time being, we are seeing a strong performance -

not combined with a strong turnover yet - but we are only an

hour into the trading session."

Saudi stocks closed higher on Tuesday with gains in all

sectors after oil prices edged up on Monday and the U.S. Senate

passed a deal to avert a "fiscal cliff" which threatened the

world's largest economy. The bill has now been passed by both

houses of Congress, helping Asian stocks to rise nearly 2

percent to hit a five-month high on Wednesday.

In Abu Dhabi, Sorouh Real Estate jumps 4.0 percent

and Aldar Properties gains 2.4 percent. There is

speculation that a long-awaited announcement of terms of their

planned merger may be made soon.

"These stocks are seeing strong performance on expectations

that an announcement on the merger is coming soon. But the

details of the merger will be key. Whichever company seems to

have come out better will see a strong stock performance going

forward," Shurrab adds.

Elsewhere, Kuwait's index rises, gaining 0.6 percent

to 5,972 points, while Qatar's market is almost flat.

Oman's bourse adds 0.2 percent, extending gains made

in the last several days, after the country said it would raise

state spending by nearly 30 percent from the original 2012 plan

in its budget for the new year. Bank Muscat, the

country's biggest bank, climbs 1.1 percent.

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0545 GMT - Oman's index may climb further on

Wednesday after the country said it would raise state spending

by nearly 30 percent from the original 2012 plan in its budget

for the new year. Other regional markets are expected to be

upbeat because of positive global sentiment.

Oman's 2013 budget, announced late on Tuesday, envisages

spending of 12.9 billion rials ($33.5 billion) as the government

provides social benefits it promised after Arab Spring protests

in 2011.

Actual spending last year was around 13 billion rials, 30

percent higher than planned, and analysts believe actual

spending may continue increasing this year. The Omani finance

minister is expected to reveal more details at a news conference

on Wednesday morning.

The Oman index closed at a new seven-month high on Tuesday,

climbing for a fourth straight session.

Regional bourses may also advance, taking their cue from

Asian stocks. Asian shares hit a five-month high and the dollar

fell on Wednesday as a last-minute deal ended the U.S. "fiscal

cliff" crisis that threatened a U.S. recession and roiled world

financial markets.

Saudi Arabia's index, which unlike most Gulf markets

traded on Tuesday, closed 0.9 percent higher.

Dubai's market may aided to some extent by the

emirate's release of its 2013 budget, which raises planned

spending moderately while cutting the size of the deficit by 18

percent.

The market dropped on the last day of trading in 2012 after

the central bank unexpectedly issued regulations curbing home

mortgages. But it is unclear how strictly the rules will be

enforced.

(Reporting by Praveen Menon; Editing by Andrew Torchia)

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