Saudi Arabia's bourse hit a three-and-a-half year high in higher turnover Tuesday amid an upbeat Gulf market sentiment after Greece sealed its second bailout package, while telecom operator Mobinil weighed on Egypt after posting earnings. Stock benchmark Tadawul All Share Index (TASI) jumped 0.9 percent to 6,966.73 points, its highest close since October 2008. Turnover climbed to $3.07 billion, a high of about four years. Saudi petrochemical stocks led gains, with bellwether Saudi Basic Industries Corp (SABIC) rising 2.9 percent to its highest close since August 2011. The sector's index added 1.6 percent. “Petrochemical stocks will be strong going forward because oil price is back on track ... economic fundamentals are improving and concerns about global demand are subsiding,” said a Riyadh-based fund manager who asked not to be identified. “Saudi Arabia is still lagging behind the trend in the global markets, despite the strong local fundamentals,” the fund manager added. Light profit-taking sent Benchmark Brent to $119.51, down 54 cents, by 1140 GMT after closing above $120 Monday for the first time since June 15. Heavyweight banks were also up. Al Rajhi Bank gained 1 percent, Samba Financial Group climbed 2.3 percent and Riyad Bank rose 1.2 percent. In Egypt, the main index slipped 2.4 percent, with telecom shares falling after Mobinil posted a quarterly loss. In Dubai, the index rose 1.7 percent to an eight-month high, but analysts warned the rally may be over-extended. Bellwether Emaar Properties jumped 3 percent, Dubai Financial Market, the only listed Gulf Arab bourse, rose 2.4 percent. “The next target is the 1,600 resistance, which matches a long-term trend line resistance,” said Bruce Powers, head of research at Trust Securities. “Some pullback or consolidation would be healthy at this point, before continuing higher.” Powers said he believed that Dubai's long-term bear market has not reversed yet and its early-year rally was unsustainable. Dubai's index fell 17 percent in 2011 and remains 75 percent below a 2008 peak despite recent gains. In Abu Dhabi, the benchmark climbed 0.9 percent, rising for a third day to reach a 20-week closing high. Telecom firm Etisalat rose 2.2 percent after proposing a 60 percent dividend for 2011. In Qatar, the index rallied for a third session, up 0.4 percent, trimming 2012 losses to 1.1 percent. “From a perspective of Westerns institutional investors that are heavily allocated in Qatar, there has to be fresh news flow,” said Julian Bruce, EFG-Hermes director of institutional equity sales.
