Dubai's index hit a three-month high on Sunday as bullish investors backed Dubai World's debt restructuring offer with further buying. The measure rose 1.9 percent to its highest finish since December 16 and taking its gains to 6.3 percent since the offer was unveiled on Thursday.
Abu Dhabi's index hit a four-month peak on similar sentiment and Qatar reached its highest close since October 11. Saudi Arabia fell for the first session in four and Kuwait also declined.
"We're waiting for more details (on Dubai World), but it seems like we now have a solution that most parties will be happy with," said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments. "The bluechips are leading the market and will attract the most foreign flow."
Dubai said it would spend up to $9.5 billion restructuring its debt-laden Dubai World conglomerate, while trade creditors are slated to receive repayment of their agreed claims through 40 percent in cash and 60 percent in the form of a publicly tradable security.
Arabtec, a trade creditor, climbed 11.6 percent. "People were expecting Arabtec would face a lot of receivables, but with Nakheel able to (part) pay contractors Arabtec is now in a stronger position," said Shurrab.
Qatar rose 0.7 percent. Qatar Gas Transport Co (Nakilat) climbed 1.3 percent and Al Khaliji Bank rose 1.7 percent. "The global economy is showing signs of improvement, so stocks exposed to world trade such as Industries Qatar (IQ) will benefit," said Keith Edwards, head of asset management at Doha-based investment company The First Investor.
"The Qatar economy is going gangbusters so there should be a trickle down effect into banks, but in terms of the private sector I don't think there's much room for an appreciation in real estate stocks or domestic industrials."
Zain fell 2.8 percent, easing from Thursday's 28-week closing high after its chairman said its $9 billion asset sale to India's Bharti Airtel could take months to complete. "The news it will take a while to complete is to be expected, but it probably affected sentiment among retail investors - institutions will be more understanding," said a Kuwait-based analyst who asked not to be identified. "There's increasing talk in the market about what the terms of a special Zain dividend will be and this will be an ongoing catalyst."
Saudi Arabia's index fell 0.1 percent as investors cashed in some of Saturday's 17-month high.
Saudi Telecom Co dropped 1.3 percent and Banque Saudi Fransi lost 1.5 percent. "People are expecting very good Q1 earnings from petrochemicals and telecoms and the run up has been obvious," said a Riyadh trader who declined to be identified.
"A lot of people are now waiting for the market to come off so they can take up new positions or accumulate further. "Every time the market goes down 0.5 percent, there is a rally and the market is well bid. (But) From a technical perspective, the market looks over-extended."
Saudi Arabia's first ever exchange traded fund, Falcom 30, ended flat on its debut. Egypt's main index rose 1.2 percent, with investors spurred by President Hosni Mubarak's return to Egypt on Saturday following surgery in Germany, traders said.