Gulf Shares Gain on U.S. Bank Rescue Plan; Emirates NBD Rises

By Zainab Fattah

Sept. 28 (Bloomberg) -- Persian Gulf shares advanced after U.S. lawmakers said they made a breakthrough in talks on a $700 billion plan to revive the credit markets and as the United Arab Emirates' central bank allowed lenders to withdraw 100 percent of their reserve requirements to ease liquidity constraints.

Emirates NBD PJSC, the U.A.E.'s biggest bank by assets, led financial stocks higher. Abu Dhabi Commercial Bank PJSC had its biggest gain since Sept. 21, while Emirates Telecommunications Corp. rose for the first time in four days. Industries Qatar also climbed.

``What happens in the U.S. is very important because the more institutions go bust there, the higher is our companies' risk of exposure,'' Mohammed Ali Yasin, the managing director of Shuaa Securities in Dubai, said in a telephone interview today. ``We've also seen liquidity returning through government institutions as more people understand the central bank's plan.''

The Dubai Financial Market General Index rose 2.5 percent to 4,060.38, bringing the two-day gain to 4.4 percent. The Abu Dhabi Securities Exchange General Index increased 2.7 percent and Qatar's Doha Securities Market 20 Index added 2 percent.

Negotiators resolved ``our differences so we can go forward with a package to stabilize the market,'' U.S. House Speaker Nancy Pelosi told reporters when negotiations ended after midnight Washington time. Lawmakers will review a written version of the plan later today, she said. The House may vote tomorrow.

Kuwait's Central Bank

U.A.E. banks are no longer required to square up their positions with the central bank at the end of the week, the central bank said Sept. 25. The monetary authority announced a 50 billion-dirham ($14 billion) fund on Sept. 22 to ease liquidity constraints caused by the seizure of global credit markets following the collapse of Lehman Brothers Holdings Inc.

Kuwait's central bank said it was ready to provide liquidity to the country's banking system if required. The Kuwait Stock Exchange Index ended a four-day drop, rising 2 percent.

The Dubai Financial Market Financial Banks Index climbed 3.5 percent, its biggest jump since Sept. 21 when the U.S. government first announced the $700 billion rescue plan.

`Most to Gain'

Emirates NBD added 4.8 percent to 8.75 dirhams. Dubai Islamic Bank PJSC, the U.A.E.'s biggest bank complying with Muslim banking rules, advanced 5.6 percent to 5.82 dirhams. Abu Dhabi Commercial Bank PJSC, the U.A.E.'s third-biggest bank by assets, gained 6.9 percent to 3.3 dirhams.

``ADCB, which is rumored to be among the most highly exposed among local banks to U.S. subprime assets, has the most to gain if a U.S. bailout is confirmed,'' Ali Khan, head of equity trading at Dubai's Arqaam Capital Ltd., said in a phone interview today.

Saudi Arabia's Tadawul All Share Index climbed 6.7 percent, the biggest one-day gain since November 2006. The measure still dropped 20 percent this quarter. The Saudi market will be closed from tomorrow for the Eid Al-Fitr holiday and will reopen on Oct. 6.

``Investors are optimistic that the international markets will rally over the holiday as an agreement on the U.S. rescue plan has been reached,'' Abdulla al-Aqil, a trader at Samba Financial Group in Riyadh, said in a telephone interview.

January 12

Saudi Basic Industries Corp. added 5.3 percent to 105.25 riyals. Al-Rajhi Bank, the kingdom's largest bank by market value, surged 9.3 percent to 79.5 riyals, its biggest jump since Jan. 5 and Saudi Telecom Co. soared 9.4 percent to 64.25 riyals, its biggest gain since Jan. 12.

Saudi Basic, the region's biggest company by market value, Al-Rajhi Bank and Saudi Telecom, the Arab world's biggest phone company, may report an increase in nine-month profit Asharq al- Awsat reported, citing forecasts by Kasab Financial Group.

Oman's Muscat Securities Market 30 Index increased 0.3 percent, while the Bahrain All Share Index fell 0.2 percent

Emirates Telecommunications, known as Etisalat, added 3.1 percent to 16.6 dirhams. Sorouh Real Estate Co., Abu Dhabi's second-biggest property company, surged 6.9 percent to 6.81 dirhams.

Industries Qatar, the largest publicly traded company in the Persian Gulf emirate, gained 3.1 percent to 137.7 riyals.

``Funds are buying the shares because they are quite cheap, especially considering its expected profit,'' Amro Motasim, head broker at Al-Ahli Bank of Qatar, wrote about Industries Qatar in an e-mail today. The shares trades at 10.1 estimated earnings, according to data compiled by Bloomberg. That compares with an average of 12.1 for stocks listed in the DSM 20 Index.

Taqa Advances

Agility rose 2.5 percent to 830 fils. The Middle East's biggest storage and logistics company said it will pay $50.5 million to buy all of Baisui United Logistics (Shanghai) Co., a Chinese logistics provider.

Abu Dhabi National Energy Co. climbed 2.1 percent to 2.42 dirhams. The state-controlled investor known as Taqa sold stakes in the Shuweihat power and water project to Sumitomo Corp., Japan's third-largest trading group, for $174 million.

Islamic Arab Insurance Co. added 2.2 percent to 1.89 dirhams. The world's biggest Islamic insurer plans to offer Islamic funds from a unit of Deutsche Bank AG.

To contact the reporter on this story: Zainab Fattah in Dubai on zfattah@bloomberg.net.