Stocks news Mideast - Banks gain as Qatar extends rebound Thursday, 02 February 2012 10:35

 Qatar's index rises for a seventh session since slumping to a three-month low in late January, with investors picking up stocks at lower levels following a sell-off that sparked was by disappointment over bank dividends.

Islamic lender Masraf Al Rayan climbs 1.0 percent and Qatar Islamic Bank adds 0.4 percent.

Qatar National Bank rises 0.4 percent. Shares in Qatar's largest bank by market value are down 4.7 percent since it proposed a 40 percent cash dividend for 2011.

"People were unhappy with dividends, but that doesn't mean investors should get out of Qatar," says Musa Haddad, head of MENA equity desk at National Bank of Abu Dhabi. "Qatar's index is consolidating."

The index rises 0.1 percent to 8,582 points.

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Dubai's Union Properties falls after the developer reported a widening annual loss, weighing on the emirate's index.

Union Properties slumps 8.6 percent after saying its 2011 loss was 1.57 billion dirhams ($0.43 billion). This compares with a loss of 1.53 billion dirhams a year earlier, while the developer's shares are down 94 percent from a 2008 peak.

Aramex climbs 0.6 percent. The courier's fourth-quarter profit rose 4 percent.

Dubai Islamic Bank drops 1.4 percent after the lender said its annual profit rose 25 percent, also proposing a 15 percent cash dividend.

Mashreq Bank plunges 9.9 percent. It reported a 59 percent drop in fourth-quarter profit as interest and fee income decreased in the year.

"A lot of (UAE bank) lending is secured against property assets and the value of these assets has fallen sharply and may worsen still, which is a contributing reason why banks are not aggressively lending," says Raj Madha, Rasmala MENA banking analyst.

Dubai's index slips 0.3 percent to 1,449 points. It has risen in 10 of the 12 sessions since slumping to a seven-year low on Jan. 16.

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Gulf markets are expected to remain upbeat on Thursday, with gains in global stocks spurring investors to commit new cash to regional shares.

Saudi Arabia's bourse hit an eight-month high on Wednesday and as the largest in the Gulf the kingdom's bourse often dictates sentiment on its neighbouring exchanges.

The Dubai and Abu Dhabi bourses slumped to multi-year lows on Jan. 16, but have since risen 11.7 and 7.5 percent, with trading volumes also up after reaching seven-year lows in 2011.

"Markets are looking good - there's liquidity coming in, mainly driven by dividend expectations," says Musa Haddad, head of MENA equity desk at National Bank of Abu Dhabi.

"There's a reason for investors to start buying again with stocks at very cheap levels, but we're not out of the woods yet."

Dubai Islamic Bank posted a 25 percent rise in annual profit and has proposed a 15 percent cash dividend, while rival lender Mashreq Bank's fourth-quarter profit plunged 59 percent as interest and fee income fell.

Asian shares, the euro and crude oil are up as encouraging manufacturing data soothed fears about the global economic fallout from the euro zone debt crisis, with a drop in European government debt yields also supporting sentiment. ($1 = 3.6730 UAE dirhams) (Reuters)