Saudi banks made a late surge on Monday to help the kingdom's benchmark rally for a third day, but most Middle East markets fell, resuming declines as regional political worries weighed. The banking index ended 5.5 percent higher, having been down 1.7 percent intraday. Riyad Bank and Banque Saudi Fransi gained about 10 percent each.
-- Dubai, Kuwait, Oman down as regional worries weigh "This has to be speculation the mortgage law will come in very soon," says a Riyadh fund manager who asked not to be identified. -- mortgage law, in planning for almost a decade, will come in soon, the Chairman of Saudi Arabia's Shoura Council said in an online report on late Sunday.
Saudi Arabia's index climbed 3.3 percent to trim its 2011 losses to 10.1 percent, with state-linked funds likely to remain buyers. These funds had targeted petrochemicals stocks in previous sessions. Saudi Basic Industries Corp) rose 2.7 percent and has made double digit gains since Thursday's six-month low, while other petrochemicals' shares are also up.
"The tendency is to compare to oil prices to petrochemicals producers' shares and their performance has diverged," said Walid Shihabi, Shuaa Securities chief. "There's a strong case for this to narrow. Petrochemicals are on track to have a strong quarter in terms of profitability, but people with a longer-term perspective will be worried about the impact of higher prices on demand." Oil prices hit a 30-month high on Tuesday. Qatar rose 2.6 percent, its largest gain in three months, on the first day's trade following a long weekend.
"Institutions are leaders in terms of liquidity - local funds have been buying and this should continue for the next few days, but foreigners are cautious and unlikely to take as big positions as they did before the crisis," said Hani Girgis, assistant chief dealer at Dlala brokerage.
Qatar stocks, along with those in other Gulf Arab markets, have tumbled amid Middle East unrest that has toppled veteran rulers in Egypt and Tunisia and sparked deadly protests in Bahrain and Oman. Those in turn raised fears Saudi Arabia, the world's top oil exporter, could become engulfed in sectarian strife. Dubai's index fell 1 percent to near Thursday's six-year low, while Kuwait, Abu Dhabi and Oman also all slid.
Dubai's benchmark, heavily skewed towards property-related stocks, is down 78 percent from a 2008 peak, while Dubai house prices have fallen about 60 percent over a similar period and are forecast to make further double digit declines. Aramex fell 3.6 percent and Emaar Properties slid 1.2 percent.
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