The Saudi measure advanced 1.1% to its highest close since June 2008, up 12.9% so far in 2014.

 

Reuters/Dubai

 

Saudi Arabia's main share index rose the most in a month to reach a fresh six-year high yesterday as investors shook off a slight dip in quarterly profit from the bourse's biggest stock.

Speculation in mid-cap stocks helped Dubai gain.

The Saudi measure advanced 1.1% to its highest close since June 2008, up 12.9% so far in 2014.

"SABIC is trading at reasonable valuations so we shouldn't expect a sharp sell-off, but at the same time there doesn't appear to be a short-term trigger to take its share price higher," said Shakeel Sarwar, head of asset management at Securities & Investment Co (SICO) in Bahrain.

"The market will now look at petrochemical product prices and the sector's second-quarter outlook."

Other large-cap Saudi stocks climbed, with Saudi Telecom Co (STC) and rival Etihad Etisalat (Mobily) gaining 3.6 and 2.1% respectively.

In Dubai, the index rose 1.7% as speculation in mid-cap stocks drove the measure to new heights. Dubai Investments and Arabtec advanced 5.1 and 4.3% respectively, while property firm Deyaar climbed 3.8%.

Dubai's stock market has gained 43.7% in 2014, having more than doubled in value last year.

"UAE (United Arab Emirates) markets continue to perform well, as is Qatar — especially its small- to mid-cap stocks; these are part of the broader recovery on Gulf markets," said Sarwar.

"But they've been rising for many months without correction or consolidation and bubbles are appearing in certain segments where valuations appear stretched. There could be a correction brewing in those sectors, but for now the momentum is strong."

Abu Dhabi dipped 0.3% as declining bank stocks pulled down the measure, while Qatar's benchmark edged up 0.2% to 12,579 points; it faces major technical resistance on its 2008 peak of 12,637 points.

In Kuwait, Islamic bank Kuwait Finance House dropped 2.3% after posting a 13% rise in first-quarter profit to 26.06mn dinars ($92.5mn); analysts had forecast 32.76mn dinars.

Elsewhere, in Bahrain index edged down 0.2% to 1,386 points and the Oman index slipped 0.05% to 6,841 points.