0943 GMT - Oman's bourse climbs to a 16-week high as investors position for year-end earnings and dividends with banks leading gains.
Shares in bluechip Bank Muscat and National Bank of Oman each rise 1.9 percent.
"People are positioning for the dividends, it's a high yield market where valuations are also reasonable," says Kanaga Sundar, Gulf Baader Capital Markets' head of research.
"We're overweight on industrial and commodity players that have the capacity to ramp up utilisation levels. Banks have attractive valuations and telecom operators will pay good dividends."
On Monday, BP announced it would drill some 300 wells for gas under the Omani desert over the next 15 years in a $16 billion project that may give a significant boost to the economy, which is about $80 billion in size.
Long-term beneficiaries of the massive project will be banks and construction-related firms, Sundar said.
The index climbs 0.3 percent to finish at 6,812 points, its highest close since Aug. 27.
0655 GMT - Dubai's Emaar Properties climbs after its board approved a bond conversion that will result in fewer new shares than expected.
Shares in Emaar gain 1.6 percent, halting a two-session drop. Emaar said it responded to requests by convertible bond holders by agreeing to issue 18.7 million new shares; it did not give details of the conversion price and timing.
Dubai Islamic Bank is the market's main support, rising 2.0 percent.
The main Dubai benchmark advances 0.8 percent to 3,170 points, heading back towards Dec. 15's intra-day high of 3,216 points, a five-year peak.
Abu Dhabi's index edges up 0.2 percent to 4,113 points, its highest level since September 2008. The market is up 56.3 percent in 2013, lagging Dubai's gain of 95.6 percent.
0545 GMT - The exercise of convertible bonds issued by Dubai's Emaar Properties will initially at least produce fewer new shares than feared, suggesting the stock could stabilise after two days in which it lost 3.9 percent.
Emaar said it responded to requests by convertible bond holders by agreeing to issue 18.7 million new shares; it did not give details of the conversion price and timing. The total is a tiny fraction of the company's 6.09 billion shares outstanding.
"The amount of new shares that will be issued is less than what we thought it was and it should have even less of an impact," says Sanyalaksna Manibhandu, senior analyst at NBAD Securities.
"I think this is a good deal - it allows some interest savings and it shows the management is flexible." The news might be positive for the stock because people had priced in a full conversion of the bonds, he adds.
Emaar also said in a statement that it had decided to approve all similar requests for conversions in future, so more dilution may occur in coming months. But the impact is likely to be small; a full conversion of the $500 million bonds that Emaar issued in 2010 would result in dilution of only 2.2 percent in the stock price if it occurred at 4.38 dirhams per share, analysts at NBK Capital earlier estimated in a note.
Amer Khan, fund manager at Shuaa Asset Management, says the stock will be choppy in coming sessions as some investors will look to book gains after its near 90 percent rise in 2013.
However, "looking into 2014, there are some catalysts at play which should attract buyers and will support the overall market in the medium-term," Khan says.
In Kuwait, the index closed on Tuesday significantly below the 200-day average, now at 7,654 points, for the first time this year - a negative technical signal.
Qatar's bourse is closed for a National Day holiday and will resume trading on Sunday Dec. 22.
The global backdrop is cautiously optimistic; Asian shares are edging higher on Wednesday as investors wait to hear when the U.S. Federal Reserve will begin unwinding its stimulus campaign. Brent oil futures are steady above $108.0 per barrel. (Reporting by Nadia Saleem; Editing by Andrew Torchia)
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