STOCKS NEWS MIDEAST-Egypt closes at 25-wk high on NSGB sale talks

Reuters Middle East

1350 GMT - Egypt's benchmark index climbs 1.7 percent,

boosted by news that Qatar National Bank is in talks

to buy a controlling stake in the Egyptian unit of France's

Societe Generale, traders say.

The Paris-based bank, which owns 77.17 percent of Egypt's

National Societe Generale Bank, said the talks were

preliminary, but the news led the market to its highest level

since March 7, with banking stocks performing especially well.

NSGB surges 10 percent, the highest increase allowed under

stock market rules. Commercial International Bank,

Egypt's biggest listed privately owned bank by assets, rises 5.4

percent.

"It's a catalyst news," says Mohamed Radwan of Pharos

Securities. "It's positively affecting the whole market,

sentiment wise."

The 30-company index closes at 5,424 points, its highest in

25 weeks, with only six stocks declining.

Among other banks, Credit Agricole, Baraka

and Suez Canal also leap 10 percent.

The relative stabilisation of the political scene in recent

weeks and indications the economic may be recovering have lured

back some of the investors who fled the market during the year

and a half since the overthrow of President Hosni Mubarak.

"The fourth quarter will see significant gains in the market

as devaluation fear eases and FDI flows into the country by the

approval of the IMF loan," says Radwan, referring to Egypt's

request for a $4.8 billion loan to support the economy

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1300 GMT - Saudi Arabia's bourse finishes lower for a second

session since Wednesday's 16-week high as investors cut

positions in large-caps after the U.S. Federal Reserve put off

further monetary easing.

The index loses 0.6 percent to end at 7,091 points,

trimming year-to-date gains 10.5 percent.

Bellwether Saudi Basic Industries Corp (SABIC)

drops 1.4 percent, Al Rajhi Bank dips 0.7 percent and

Samba Financial Group falls 1.5 percent.

U.S. Federal Reserve Chairman Ben Bernanke kept the door

open for further monetary easing, which spurred gains in global

markets, but analysts were predicting some declines in Gulf

bourses if policy action was not announced.

"The Saudi index has gone above 7,000 (a key psychological

level) but it was mainly driven by speculative stocks and

bluechips underperformed significantly. This is a bad sign,"

says Farouk Miah, acting head of research at NCB Capital. "You

can't have a rally based just on speculative stocks. This is

partially because of lack of news."

In the next few weeks, large-caps could see increased

investor interest as they line up for third-quarter earnings, he

adds.

The insurance sector index gains 0.8 percent,

accounting for the heaviest turnover. Retail investors target

these small-caps when global markets are volatile.

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1117 GMT - UAE bourses give back earlier gains as investors

look for new catalysts to increase risk and regional and foreign

institutional selling pushes Qatar's market lower.

Dubai's bellwether Emaar Properties sheds 0.9

percent, engineering firm Drake and Scull falls 1.3

percent and contractor Arabtec slips 0.4 percent.

"Some over-bought names are pulling back slightly and until

Q3 earnings, there isn't any regional catalyst," says Amer Khan,

fund manager at Shuaa Asset Management.

"Our markets will look to direction from global markets,

which are driven by policy action."

U.S. Federal Reserve Chairman Ben Bernanke stopped short of

signalling extra monetary easing was imminent but kept the door

open for action. Global markets gained on Friday but regional

investors are waiting for a stronger catalyst to increase risk.

Dubai's index ends 0.1 percent lower at 1,546

points, trimming year-to-date gains to 14.2 percent.

Abu Dhabi's benchmark slips 0.2 percent to finish at

2,557 points. Banks weigh, with Abu Dhabi Commercial Bank

down 1.8 percent and National Bank of Abu Dhabi

losing 0.5 percent.

In Qatar, the measure ends 0.3 percent lower at 8,455

points, marking a technical correction. The market rallied to a

15-week high last week and analysts expect it to drop to 8,360

before continuing higher.

Heavyweight Industries Qatar sheds 0.7 percent,

Qatar Electricity and Water eases 0.2 percent and

Qatar National Bank is 0.4 percent lower.

"The market is trading in volumes below its 30-day average.

Non-Qatari institutions remain net sellers on the market. They

are waiting to see the liquidity move to infrastructure

developments," says Ahmed Shehada, head of trading at Qatar

National Bank Financial Services.

The government has outlined public investment plans worth

$95 billion over five years to 2016 ahead of hosting the soccer

World Cup in 2022, but progress has been slow on tendering

infrastructure projects.

Last month, a $124 million contract to build Qatar's first

rail system was awarded to Australian construction giant

Leighton Holdings.

Elsewhere, Kuwaiti small-caps drive a rally on the index

which closes 0.6 percent higher at 5,897 points.

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0910 GMT - Saudi Arabia's bourse gives back some of the

recent gains as investors sell petrochemical stocks, but the

declines are limited as buyers target small-caps.

The kingdom's index sheds 0.2 percent to 7,118

points, heading for a second-session decline since Wednesday's

16-week high.

Bellwether Saudi Basic Industries Corp (SABIC)

sheds 0.3 percent, Yanbu National Petrochemical slips

0.6 percent and Saudi Kayan Petrochemical dips 0.4

percent.

Banks are also lower with the sector's measure down

0.3 percent.

U.S. Federal Reserve Chairman Ben Bernanke kept the door

open for further monetary easing, which spurred gains in global

markets but analysts were predicting some declines in Gulf

bourses if policy action was not announced.

"People who were expecting something, were disappointed, but

even if something happened, it's already priced into global

markets so the impact is minimal to the region," says Farouk

Miah, acting head of research at NCB Capital.

The insurance sector gains 0.6 percent.

Elsewhere, Oman's benchmark ends 0.5 percent higher

at 5,506 points, halting a four-session decline as investors

increase risk at the onset of September.

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0727 GMT - UAE markets edge higher in early trade as

investors buy property stocks after last week's declines, while

Kuwait's bourse hit an eight-week high.

Dubai's bellwether Emaar Properties is the main

support, rising 0.9 percent. Contractor Arabtec gains

1.4 percent and Deyaar adds 1.1 percent.

The emirate's index climbs 0.4 percent to 1,553

points, heading for its second gain in last six sessions.

"A penant was formed on the DFMGI in the previous session

along with a closing again outside the uptrend channel," MENA

Corp Securities says in a note. "Since the penant was formed

after a drop then we expect a bearish movement and the index

could drop to the 1510 level. Breaking the 1540 level will

confirm the direction to the 1510 level."

Abu Dhabi's First Gulf Bank and Sorouh Real Estate

rise 0.3 and 1.9 percent respectively.

The emirate's benchmark edges down 0.02 percent to

2,561 points.

In Kuwait, investors open fresh positions at the beginning

of the month, lifting the measure by 0.5 percent to

5,891 points, its highest level since July 4.

Small-caps rally, with Gulf Investment House

rising 1.5 percent, Aldar National Real Estate gaining

1.7 percent and Al Aman Investment Co up 5.8 percent.

Investors are buying battered stocks after the market

slumped to an eight-year low on Aug. 12, but small-cap stocks

are driving the rebound.

"Our market continues to lack foreign institutional

investors with long-term views," says Fouad Darwish, head of

brokerage at Global Investment House. "I don't think this is

sustainable unless bigger stocks are a part of this.

Profit-taking will happen and will have more of an impact."

The long-standing political crisis in Kuwait, a hamper to

economic development, affected second-quarter earnings of banks

and hit investor sentiment in recent months.

Elsewhere, Qatar's index eases 0.2 percent to 8,471

points, with trading muted. Oman's benchmark climbs 0.4

percent to 5,499 points.

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0555 GMT - Gulf markets are seen supported by positive

global shares move after U.S. Federal Reserve Chairman Ben

Bernanke kept the door open for further monetary easing, but

thin trading volumes are likely to keep gains in check.

Bernanke expressed "grave concern" for the stagnating U.S.

job market and said the central bank was prepared to take

further steps to strengthen the economy if necessary.

Oil rose above $114 a barrel in volatile trading on Friday,

taking gains in August above 9 percent.

"Today we should see some of the positive news from U.S.

trickle in at early trade," says Marwan Shurrab, vice-president

and chief trader at Gulfmena Investments. "The focus will be

mostly on international stability with regards to policy and Q3

numbers coming at the end of the month."

Trading for the first session of the month for all the Gulf

markets except Saudi Arabia, should also encourage new

positions.

Saudi Arabia's bourse struggled to extend gains on

Saturday, easing 0.1 percent from Wednesday's 16-week high.

In Doha, Qatar National Bank will see increased

interest after the lender said it was in preliminary talks to

purchase controlling stake in French bank Societe Generale's

(SG) Egyptian unit National Societe Generale Bank

The Qatari bank also increased its stake in UAE's Commercial

Bank International from 16.5 percent to 39.9 percent,

it said on Thursday.

(Reporting by Nadia Saleem; Editing by Dinesh Nair)

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