Swiss Franc Strengthens Against Major Peers as Crude Oil Climbs on Turmoil

The Swiss franc rose against all of its 16 most-traded counterparts as crude oil climbed to a 29- month high on concern turmoil in North Africa and the Mideast will disrupt supply, encouraging investors to seek refuge.

The dollar lost the most in a five days versus the euro in six weeks on speculation a gain in U.S. payrolls last month won’t be enough to spur the Federal Reserve to raise interest rates soon even as the European Central Bank prepares to lift its borrowing costs.

“We’re seeing a certain amount of flight to quality because of concerns in the Middle East,” said Dennis Cajigas, a senior market strategist at the brokerage MF Global Holdings Ltd. in Chicago. “The Swissie is making big moves largely due to that.”

The franc rose 0.8 percent to 92.45 centimes per dollar at 5 p.m. in New York, from 93.16 yesterday, and strengthened 0.4 percent for the week. It reached a record high of 92.02 centimes on March 2. The Swiss currency gained 0.6 percent against the euro to 1.2933, from 1.3013.

The greenback weakened 0.1 percent to $1.3987 per euro, from $1.3969 yesterday, after earlier gaining 0.2 percent. It reached $1.40 for the first time since Nov. 8. The shared currency was little changed at 115.13 yen, and the dollar fell 0.2 percent to 82.32 yen.

Bets on Euro

Futures traders increased bets the euro will gain versus the dollar to the most since January 2008, figures from the Washington-based Commodity Futures Trading Commission showed.

The difference in the number of wagers by hedge funds and other large speculators on an advance in the euro compared with those on a drop -- so-called net longs -- was 51,308 on the week ended March 1, the most since Jan. 11, 2008.

Forces loyal to Libya’s Muammar Qaddafi used tear gas and gunfire to suppress protests in Tripoli as rebels pushed their front lines westward to Ras Lanuf, an oil port town about halfway to the capital from opposition-stronghold Benghazi. The conflict has left 6,000 people dead, the opposition forces’ spokesman, Abdullah Al Mahdi, told Al Jazeera today.

Crude oil for April delivery rose as much as 3.2 percent to $105.17 a barrel in New York, the highest level since September 2008. U.S. stocks declined, with the Standard & Poor’s 500 Index dropping 0.7 percent.

The franc tends to strengthen during periods of financial stress because Switzerland’s export-reliant economy doesn’t need foreign capital to balance the current account, the broadest measure of trade.

The dollar fluctuated against the euro after Labor Department data showed U.S. employers added 192,000 workers in February, compared with a Bloomberg News survey forecast for 196,000. The unemployment rate unexpectedly fell to 8.9 percent, the lowest level since April 2009.

ECB ‘Out Front’

“The unemployment number was by no means a blowout number that’s going to make the Fed consider tightening any time soon,” said Boris Schlossberg, director of research at online currency trader GFT Forex in New York. “That leaves the ECB way out front in terms of interest-rate differential.”

The greenback tumbled yesterday after ECB President Jean- Claude Trichet said the central bank may increase interest rates at its next meeting to counter inflation pressures. Fed Chairman Ben S. Bernanke reiterated on March 1 in Senate testimony that while growth will quicken in the U.S., he still wants to see a “sustained period of stronger job creation.”

IntercontinentalExchange Inc.’s Dollar Index, which tracks the greenback against the currencies of six major trade partners, lost 1.1 percent for the week as investors speculated the Fed would lag behind other central banks in raising interest rates. The gauge is weighted 57.6 percent to movements in the euro, which surged 1.7 percent against the dollar this week, the most since the five days ended Jan. 21.

Brazil’s Real Falls

The Brazilian real dropped 0.3 percent to 1.6546 per dollar, erasing earlier gains, after a report that the nation’s government may announce new measures next week to curb the currency’s appreciation.

The moves could include a tax increase and stricter controls of foreign capital and could be announced March 9 or 10, the Sao Paulo-based IG news service reported without saying where it got the information.

New Zealand’s dollar fell against most major counterparts after the International Monetary Fund said it will likely cut the nation’s growth forecast.

The kiwi, as the currency is nicknamed, touched its weakest level in five months against the greenback. It reached 73.39 U.S. cents today, the lowest level since Oct. 1, before trading at 73.83 cents, down 1.8 percent from 75.16 on Feb. 25. It slipped 0.4 percent today.

N.Z. Earthquakes

The Reserve Bank of New Zealand will reduce its benchmark rate by 15 basis points over the next 12 months, compared with a prediction for an increase of 54 basis points a month ago, according to a Credit Suisse Group AG index. Two earthquakes in the past six months may have caused as much as NZ$20 billion ($15 billion) of damage, Prime Minister John Key has said.

The South Korean won gained versus most major peers, rising 0.5 percent to 1,114.60 per dollar. Asian currencies strengthened this week, with the Bloomberg-JPMorgan Asia Dollar Index increasing 0.4 percent, on speculation central banks will tolerate appreciation and raise borrowing costs to tame inflation.

To contact the reporters on this story: Allison Bennett in New York at abennett23@bloomberg.net; Catarina Saraiva in New York at asaraiva5@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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Euro Rallies Most Against Dollar in Six Weeks on ECB Rate-Boost Prospects

The euro climbed the most versus the dollar in six weeks as the European Central Bank said it may raise interest rates next month, while Federal Reserve officials signaled the U.S. economy still needs stimulus.

The Swiss franc rose to a record against the U.S. currency as turmoil pushed oil to a 29-month high. The greenback fell versus most major peers on speculation a payrolls gain wasn’t enough to spur the Fed to raise rates soon. Fed Chairman Ben S. Bernanke wouldn’t rule out more Treasury buys to support growth. U.S. retail sales rose last month, data next week may show.

“The takeaway from a very busy week is still a clear tightening signal from the ECB, relatively dovish comments from Bernanke and a U.S. jobs report that’s positive, but not positive enough to alter U.S. rate expectations,” said Vassili Serebriakov, a currency strategist at Wells Fargo & Co. in New York. “There’s scope for some further near-term dollar weakness or euro strength.”

The euro climbed 1.7 percent to $1.3987, the most since the five days ended Jan. 21, from $1.3754 on Feb. 25. It added 2.5 percent to 115.13 yen, from 112.35. The dollar appreciated 0.8 percent to 82.32 yen, from 81.68.

The franc advanced 0.4 percent to 92.45 centimes per dollar and touched a record 92.02 centimes on March 2. It tends to gain during periods of financial stress because Switzerland’s export- reliant economy doesn’t need foreign capital to balance the current account, the broadest measure of trade.

Rate Outlook

The euro gained versus 15 of its 16 most-traded counterparts on March 3 after ECB President Jean-Claude Trichet said an “increase of interest rates in the next meeting is possible” to counter inflation. He spoke in Frankfurt after the ECB left its key rate at 1 percent, where it’s been since May 2009.

The Fed has held its benchmark at zero to 0.25 percent since December 2008, and won’t increase it until the first quarter of 2012, according to the weighted average in a Bloomberg survey of 74 economists.

“Trichet’s comments were a game-changer,” said Carl Forcheski, a director on the corporate currency sales desk at Societe Generale SA in New York. “The U.S. has 407,000 jobs created over the last three months -- that’s good, but I’m not popping the champagne bottle.”

Employers in the U.S. added 192,000 positions in February, the most since May, after a revised gain of 63,000 in January, Labor Department data showed yesterday. The median forecast in a Bloomberg News survey was for 196,000. The unemployment rate unexpectedly fell to 8.9 percent, the lowest since April 2009.

ECB ‘Out Front’

“The unemployment number was by no means a blowout number that’s going to make the Fed consider tightening anytime soon,” said Boris Schlossberg, director of research at online currency trader GFT Forex in New York. “That leaves the ECB way out front in terms of interest-rate differential.”

Bernanke, in two days of semiannual monetary-policy testimony to congressional committees this week, said rising commodities won’t derail the recovery. He reiterated that while U.S. economic growth will accelerate, he still wants to see a “sustained period of stronger job creation.”

The Fed chief also signaled he’ll keep the central bank on course to finish buying $600 billion of Treasuries through June to spur growth, and didn’t rule out another round of purchases.

U.S. retail sales increased 1 percent in February, from 0.03 percent the previous month, according to the median forecast of 63 economists in a Bloomberg survey before the Commerce Department reports the data March 11.

Bets on Euro

Futures traders increased bets to the most since January 2008 that the euro will gain versus the dollar, figures from the Washington-based Commodity Futures Trading Commission showed.

The difference in the number of wagers by hedge funds and other large speculators on an advance in the euro compared with those on a drop -- so-called net longs -- was 51,308 on the week ended March 1, the most since Jan. 11, 2008.

Crude oil for April delivery rose as much as 7.5 percent this week to $105.17 a barrel in New York, the highest level since September 2008, on concern supply will be disrupted.

Libyan rebels seeking to end Muammar Qaddafi’s 41-year rule clashed yesterday with security forces loyal to him after repelling government attempts to retake oil hubs in the east. The conflict has left 6,000 people dead, compared with a 1,000 estimate cited by the United Nations, the opposition forces’ spokesman, Abdullah Al Mahdi, told Al Jazeera yesterday.

New Zealand’s dollar reached the weakest in 18 years versus its Australian counterpart on speculation its central bank will cut borrowing costs after the second earthquake in six months.

IMF Forecast

The currency, nicknamed the kiwi, fell versus all of its 16 most-traded peers this week after the International Monetary Fund said it will “likely” cut its New Zealand growth forecast from the current 3 percent after the earthquakes. IMF spokeswoman Caroline Atkinson spoke at a news conference in Washington this week.

The kiwi touched NZ$1.3769 per Australian dollar yesterday, the weakest level since June 1992. It tumbled 1.4 percent on the week to NZ$1.3735, and fell 1.8 percent to 73.83 U.S. cents.

The Reserve Bank of New Zealand will reduce its benchmark rate by 0.15 basis points over the next 12 months, compared with a prediction for an increase of 54 basis points a month ago, according to a Credit Suisse Group AG index.

The two quakes may have caused as much as NZ$20 billion ($15 billion) of damage, according to Prime Minister John Key.

To contact the reporters on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net; Allison Bennett in New York at abennett23@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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Saudi Aramco Raises April Crude Oil Prices for Asia, Northwestern Europe

By Anthony DiPaola - Mar 5, 2011 11:46 PM GMT+0700

Saudi Aramco, the world’s largest oil exporter, raised official selling prices for all crude grades for customers in Asia and Northwest Europe for April shipments and cut prices for customers in the U.S.

Saudi Arabia’s state-owned producer increased the formula prices for Arab Extra Light, Light and Medium crudes to Asia by 65 cents a barrel, a person familiar with the pricing decision said today. Arab Light to Asia will sell at the highest since July 2008 at $1.95 a barrel above the average of the Oman and Dubai grades, the two Gulf benchmarks used by traders.

Six officials at refineries in Asia polled by Bloomberg said they expected a price increase reflecting gains in fuel processing profits. The difference between gasoil and fuel oil prices, the so-called black-white spread, rose to the widest since 2008, suggesting refiners with the ability to break fuel oil into higher value oil products are earning more.

Arab Super Light to Asia will increase by 25 cents a barrel, to $6.05 a barrel above the Oman and Dubai average and Extra Light will rise to a $3.95 a barrel premium.

Aramco set the price for its Extra Light crude oil for April loadings for U.S. buyers at a premium of $2.60 a barrel over the Argus Sour Crude Index, 10 cents lower than March cargoes. The price of Arab Light crude to the U.S. will be at parity with the Argus index, 30 cents a barrel lower than March.

Oil Climbs

Crude oil for April delivery rose 2.9 percent during February on the New York Mercantile Exchange to close at $96.97 a barrel on Feb. 28. Oil is up more than 20 percent since unrest flared up in Libya in the middle of last month.

Clashes over the last two weeks between government troops and forces opposed to Libyan leader Muammar Qaddafi have slashed oil exports from the North African country. Concern protests may spread to another Middle East producer, such as Algeria, is keeping oil at its highest price in almost two and a half years.

Saudi Arabian Oil Minister Ali Al-Naimi on Feb. 22 said his country and other Organization of Petroleum Exporting Countries members would be ready to counter “any disruption anywhere in the world” by pumping more crude.

Aramco this week offered European refiners additional cargoes of Arab Light crude for loading this month, two officials involved in the negotiations said. The official prices for light grades to Northwest Europe and the Mediterranean Sea gained as oil prices rose and as lighter Libyan crudes were taken out of the market.

2008 Cuts

As OPEC’s biggest and most influential producer, Saudi Arabia had led the group’s supply cuts in late 2008 to support prices. At its most recent meeting in December, OPEC left unchanged the official production quotas that most members are now exceeding anyway to take advantage of higher prices.

Saudi Arabia pumped 8.43 million barrels of oil a day last month, 25,000 a day more than in January and about 375,000 barrels a day above its OPEC quota, according to Bloomberg estimates. Jamie Webster, an analyst at PFC Energy in Washington, estimates the country is now pumping more than 9 million barrels a day.

A month ago, on Feb. 2, Aramco had cut most of its official selling-price differentials for crude shipments in March, raising only the price formulas for cargoes to the U.S.

For U.S. shipments, Aramco has priced its crude since January 2010 against the ASCI marker, an index of high-sulfur oil produced in the Gulf of Mexico, replacing a lighter crude benchmark of West Texas Intermediate priced by Platts, the energy-information division of McGraw Hill Cos. WTI also trades as a futures contract on the New York Mercantile Exchange.

The following table gives the differentials of the four regions in relation to benchmark prices, the month-on-month change and the degrees of gravity as defined by the American Petroleum Institute. Prices are in U.S. dollars a barrel.

*T United States

Variety API April March Change Extra Light 38.5 +2.60 +2.70 -0.10 Arab Light 32.5 0 +0.30 -0.30 Arab Medium 31 -2.20 -1.85 -0.35 Arab Heavy 27 -3.90 -3.65 -0.25 ----------------------------------------------------

Prices for customers in the U.S. expressed as a differential against Argus Sour Crude Index published by Argus Media Ltd.

Asia

Variety API April March Change Super Light 50.6 +6.05 +5.80 +0.25 Extra Light 38.5 +3.95 +3.30 +0.65 Arab Light 32.5 +1.95 +1.30 +0.65 Arab Medium 31 -0.45 -1.10 +0.65 Arab Heavy 27 -2.55 -3.05 +0.50 --- --------------------------------------------------

Prices for customers in Asia are expressed as a differential against the average of Oman and Dubai grades, the two Arabian Gulf benchmarks used by Asian oil traders. The Dubai and Oman price assessments are published by Platts, the energy- information division of McGraw-Hill Cos.

Northwestern Europe

Variety API April March Change Extra Light 38.5 -1.10 -1.75 +0.65 Arab Light 32.5 -3.40 -4.20 +0.80 Arab Medium 31 -5.90 -6.10 +0.20 Arab Heavy 27 -8.45 -8.55 +0.10 ---------------------------------------------------

Mediterranean

Variety API April March Change Extra Light 38.5 -1.60 -3.15 +1.55 Arab Light 32.5 -3.75 -4.75 +1.00 Arab Medium 31 -7.70 -7.30 -0.40 Arab Heavy 27 -10.05 -9.70 -0.35 ---------------------------------------------------

Prices for Northwest European and Mediterranean customers are expressed as a differential against the Brent weighted average posted by Intercontinental Exchange, free on board Ras Tanura.

To contact the reporters on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net.

To contact the editors responsible for this story: Stephen Voss on sev@bloomberg.net.

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Copper Demand in China May Expand 7% This Year, Jiangxi Copper Forecasts

By Bloomberg News - Mar 5, 2011 4:46 PM GMT+0700

Copper demand in China may grow by 7 percent this year on strong economic growth, said Jiangxi Copper Co., as the country’s largest producer boosts output.

“China’s economic growth and investment will keep demand at a healthy level,” Li Yihuang, chairman of Jiangxi, said in an interview in Beijing today without elaborating. The company will lift production capacity to 1 million metric tons, up from 900,000 tons last year, he said. China is the largest buyer of the metal.

Copper touched a record $10,190 a ton last month after surging 30 percent in 2010 as the global economy recovered from the worst recession since World War II. Demand is proving to be resilient to the high prices and there hasn’t been any slowdown from China, Chile’s Mining and Energy Minister Laurence Golborne has said.

“As China continues to improve infrastructure and its power grid, it will support the demand for copper,” said Helen Lau, an analyst at UOB-Kay Hian Ltd. “The forecast is actually realistic and in line with our expectations.”

A decline in imports of refined material last year may result in higher shipments in 2011, according to Peter Hickson, UBS AG’s global basic materials and commodities strategist, Jan. 18. Imports of copper, including the refined metal, alloy and products, were little changed at 4.29 million tons in 2010, according to customs data.

Strong Growth

Demand for copper is surging as the nation plans to build more homes, autos and appliances and upgrade power-grid networks. China’s government will target 8 percent economic growth this year and “decisively” curb increases in prices that could affect social stability, Premier Wen Jiabao said in his annual state-of-the-nation report today.

Copper for three-month delivery closed 0.2 percent lower yesterday at $9,895 a ton on the London Metal Exchange.

“Copper sales on the spot market right now are rather weak, but for the year, copper will be in short supply,” said Jiangxi’s Li, who spoke ahead of the meeting of the National People’s Congress.

China’s economy expanded 10.3 percent in 2010, the fastest pace in three years, statistics bureau data show, compared with growth of 9.2 percent in 2009. After Japan reports gross domestic product for the fourth quarter on Feb. 14, comparative data may show China was the second-biggest economy last year.

In nominal terms, gross domestic product is more than 100 times bigger than in 1978, when Communist Party leader Deng Xiaoping began rolling out free-market policies. While China outstripped Germany in 2007 and the U.K. and France in 2005, the economy remains less than half as big as that of the U.S.

To contact the reporter on this story: Yu Xiao in Beijing at yxiao@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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U.S. Stocks Rise as Economic Optimism Overshadows Increase in Oil Prices

By Cecile Vannucci and Nikolaj Gammeltoft - Mar 5, 2011 12:01 PM GMT+0700

U.S. stocks rose this week, with a rebound in the final hour of trading yesterday preserving the advance, after improvements in employment and service industries overshadowed concern that oil’s surge will slow economic growth.

Equities pared their weekly gain yesterday as crude rose to a 29-month high of $104.42 a barrel. Pfizer Inc. (PFE) and Merck & Co. led advances in the Dow Jones Industrial Average, gaining at least 2.7 percent. Agilent Technologies Inc. (A) rose 10 percent, the most in the Standard & Poor’s 500 Index, after the maker of scientific-testing equipment boosted its long-term sales and margin forecasts. Motorola Mobility Holdings Inc. fell 13 percent on concern about competition from Apple Inc.’s iPad 2.

The S&P 500 rose 0.1 percent to 1,321.15 after losing 1.7 percent the prior week. The Dow climbed 39.43 points, or 0.3 percent, to 12,169.88. Oil futures advanced 6.7 percent, extending their advance since Feb. 11 to 22 percent.

“It’s a battle between the negative geopolitical environment versus the very strong economic fundamentals,” said Benjamin Pace, who helps oversee about $420 billion as the New York-based chief investment officer of Deutsche Bank Private Wealth Management. “The economic environment is very equity friendly. The current geopolitical environment and its impact on oil prices, not so much.”

Production Cut

The S&P 500 lost 0.7 percent yesterday as crude oil jumped after fighting in Libya cut crude production in the African country by as much as 1 million barrels a day, spurring concern that there will be a slowdown in U.S. consumer spending, which makes up about 70 percent of the world’s biggest economy. The stock index had surged 1.7 percent on March 3 for the biggest increase in three months, pushed up by reports showing claims for first-time jobless benefits decreased.

The S&P 500 has gained 5.1 percent this year, amid government stimulus measures, improving economic data and higher-than-estimated corporate earnings. Per-share profit topped estimates at 71 percent of the 470 companies in the S&P 500 that have reported results since Jan. 10, according to data compiled by Bloomberg.

“Oil is the ultimate wildcard in terms of being a drag on the market and economic growth,” said Stephen Wood, the New York-based chief market strategist for Russell Investments, which manages $155 billion. “That can overshadow the modest yet measurable improvement in the economy which we now see being registered in an improving labor market.”

Jobless Rate Falls

The jobless rate unexpectedly declined to 8.9 percent, the lowest level since April 2009, and employers added 192,000 jobs in February, Labor Department figures showed yesterday. Applications for unemployment benefits fell by 20,000 to 368,000 in the week ended Feb. 26, the Labor Department report said on March 3. Economists forecast claims would rise to 395,000, according to the median estimate in a Bloomberg News survey. The total number of people receiving unemployment insurance fell to the lowest level since October 2008.

The Institute for Supply Management’s index of non- manufacturing businesses rose to 59.7, the highest level since August 2005, from 59.4 in January. Economists forecast the gauge would fall to 59.3, according to the median estimate in a Bloomberg News survey. A reading above 50 signals growth. The institute’s factory index rose to 61 in February, the highest since May 2004, from January’s 60.8, according to the median estimate in a Bloomberg News survey of economists.

The better-than-estimated data pushed the Citigroup Economic Surprise Index to its highest level ever yesterday, according to data compiled by Bloomberg.

Pfizer, Merck

Pfizer rallied 4.2 percent to $19.66 for the biggest gain in the Dow. At least four states are considering legislation backed by the world’s biggest drugmaker that would impede the efforts of Medicaid and private insurers to save money by widening the use of generic drugs. Merck, the second-biggest U.S. drugmaker, gained 2.7 percent to $33.06. Health-care companies rose the most among 10 industries in the S&P 500, climbing 2.4 percent.

Agilent Technologies rose 10 percent to $46.75, the biggest gain in the S&P 500. The world’s biggest maker of scientific- testing equipment increased its long-term sales and operating margin forecasts at a meeting with analysts, JPMorgan said in a note to clients.

JDS Uniphase Corp. (JDSU), the network-analysis company which bought Agilent’s network solutions test unit last year, also climbed 10 percent, ending the week at $27.37.

Energy Stocks

Higher oil prices drove energy shares in the S&P 500 to a 0.4 percent gain. The stocks have surged 34 percent since March 9, 2010 -- the one-year anniversary of the index’s slump to a 12-year low -- leading the S&P 500’s advance. Chevron Corp. (CVX), the second-largest U.S. oil company, climbed 1.6 percent $103.75 this week.

Financial stocks had the biggest decline in the S&P 500, dropping 1.6 percent. The KBW Bank Index (BKX) slumped 2.4 percent as 23 of its 24 stocks retreated.

Citigroup Inc. (C) dropped 3.4 percent to $4.54. The third- largest U.S. bank was cut to “neutral” from “buy” by analysts at Bank of America Corp., who also cut Goldman Sachs Group Inc. (GS) to “neutral” from “buy.” Goldman Sachs fell 2.5 percent to $161.

JPMorgan Chase & Co. (JPM), the second-biggest U.S. bank, decreased the most in the Dow, losing 2.5 percent to $45.52.

Motorola Mobility slipped 13 percent to $26.65, the second- biggest decline in the S&P 500. The mobile-phone maker was cut to “neutral” from “outperform” by Cowen & Co. analyst Matthew Hoffman, who cited competition for the company’s Xoom tablet from Apple’s iPad 2, which will go on sale on March 11.

Hudson City Bancorp Inc. (HCBK) fell the most in the S&P 500, sinking 13 percent to $9.88. The largest U.S. bank to forgo a government bailout said regulators may require it to “reduce its level of interest-rate risk and funding concentration.” About 98 percent of its borrowed funds are structured putable borrowings, which may have to be replaced if interest rates rise significantly, Hudson City said. The bank said it would have to buy back about 26 percent of its borrowings in the next 12 months if interest rates jumped by 3 percentage points.

To contact the reporter on this story: Cecile Vannucci in New York at cvannucci1@bloomberg.net; Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net.

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

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Dubai Stocks Rise Most in a Month After 15% Tumble, Following Saudi Rally

By Zahra Hankir - Mar 6, 2011 7:02 PM GMT+0700

Dubai shares advanced the most in a month, leading gains in the Middle East, as a rebound in Saudi Arabia’s index yesterday spurred speculation the selloff in regional stocks because of political unrest was overdone.

Emmar Properties PJSC, builder of the world’s tallest tower, increased 2.5 percent and Dubai Islamic Bank PJSC (DIB) advanced the most since October. The DFM General Index (DFMGI) climbed 2.7 percent, the most since Feb. 2, to 1,389.04 at the 2 p.m. close in the emirate. The gauge has lost 15 percent since Tunisia’s President Zine El Abidine Ben Ali was ousted in January. Saudi Arabia’s Tadawul All Share Index (SASEIDX) rallied 7.3 percent yesterday, the most since November 2008, snapping a 13- day losing streak. It gained 0.8 percent at 2:21 p.m. in Riyadh.

“The gains were prompted by what we saw yesterday in Saudi Arabia,” said Sebastien Henin, who helps oversee $110 million at The National Investor in Abu Dhabi. “Investors took this opportunity to buy. Looking forward, there is no visibility as the news flow is very rich and there are tensions across the Gulf Cooperation Council countries.”

Stocks tumbled across the region last week, sending the Bloomberg GCC 200 Index (BGCC200) of Persian Gulf shares to the lowest level since 2009 and propelling the Saudi benchmark index down the most in two years, on concern turmoil in Libya will spread to the kingdom after uprisings erupted in Bahrain and Oman. The GCC 200 measure rose 0.6 percent today.

An increase in oil prices will boost the “strong condition” of the kingdom, Finance Minister Ibrahim al-Assaf told Al Arabiya TV yesterday. Stock prices in Saudi Arabia, which holds about 20 percent of the world’s proven oil reserves, are attractive and the Saudi Public Pension Agency bought shares last week, he said.

Saudi Rallies

Oil rose 2.5 percent to a 29-month high on March 4. Crude oil for April delivery increased to $104.42 a barrel on the New York Mercantile Exchange, the highest settlement since Sept. 26, 2008. The six nations of the GCC, including the United Arab Emirates and Qatar, supply about a fifth of the world’s oil.

Shiite Muslims in the eastern province of Saudi Arabia held two demonstrations on March 3 to call for the release of prisoners. Saudi Arabia’s Interior Ministry said demonstrations, marches and sit-ins are “strictly” prohibited under the kingdom’s laws, the official Saudi Press Agency reported March 5, citing an unidentified official at the ministry.

Emaar rose the most since Feb. 2 to 2.47 dirhams. Dubai Islamic Bank gained 4 percent, the most Oct. 20, to 2.10 dirhams.

Bahrain’s BB All Share Index rose 1.3 percent. Kuwait’s SE Price Index climbed 0.7 percent and Abu Dhabi’s ADX General Index (ADSMI) advanced 1.1 percent. Oman’s MSM30 Index (MSM30) increased 0.8 percent. Qatar’s gauge is closed for a holiday.

Egypt Bourse

In North Africa, Egypt stock trading remained suspended today after the bourse postponed plans to resume operations as Prime Minister Ahmed Shafik quit. No date was given for the opening. The bourse has been shut for more than a month amid a popular revolt that toppled the 30-year-old regime of former President Hosni Mubarak. The measure lost 16 percent in the week ended Jan. 27, when it last traded.

“The fact that Egypt’s market is not open today is a very big negative, especially as we do not have an idea of when it may reopen,” said Ahmed Talhaoui, the Abu Dhabi-based head of investment at Royal Capital. “We expect a lot of volatility in regional markets.”

Tunisia’s stock exchange said it will resume operations tomorrow, according to a statement on its website. The market regulator suspended trading on Feb. 28. The benchmark Tunindex has retreated 21 percent so far this year.

In Israel, the TA-25 Index slipped 0.3 percent in Tel Aviv. The benchmark Mimshal Shiklit government bond due January 2020 dropped, pushing the yield on the 5 percent bond up 2 basis points to 5.19 percent.

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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