Nov. 4 (Bloomberg) -- Persian Gulf stocks gained, led by financials and telecommunications companies, as lending costs declined in the region, suggesting measures taken by central banks to unlock the credit markets are working.

First Gulf Bank PJSC, a state-owned commercial lender in the United Arab Emirates, climbed to the highest in more than a week after its board approved a share-buyback plan. Qatar Telecom QSC advanced for a seventh day, as its board announced dividend plans. Emirates Integrated Telecommunications Co. gained the most in two weeks, after its chief executive officer said the company known as Du plans to increase market share.

Saudi Arabia's Tadawul All Share Index rose 2.7 percent to 6,045.14, bringing the gain for the month to 9.2 percent. The Dubai Financial Market General Index added 0.3 percent and the Abu Dhabi Securities Exchange General Index increased 0.8 percent. In Qatar the DSM 20 Index advanced 1.5 percent.

``There is some relief as far as the cost of borrowing is concerned,'' Reda Gomaa, portfolio manager at Mashreq Bank PSC's asset-management arm in Dubai, said in a phone interview. ``The U.A.E. central bank has been injecting funds into the system and that has improved the dirham liquidity. Equities are providing a good opportunity for long-term investors.''

Lending Rates

The U.A.E., the second-biggest Arab economy and holder of about 8 percent of the world's oil reserves, has pledged to inject about 120 billion dirhams ($33 billion) into the country's banks to meet a liquidity squeeze. The three-month Emirates interbank offered rate, the price banks charge each other for loans, fell to 4.58 percent, the lowest since Oct. 7.

Oman's Muscat Securities Market 30 Index rose 0.6 percent. The Bahrain All Share Index gained 0.3 percent and Kuwait's benchmark index advanced 0.4 percent.

First Gulf Bank added 1.6 percent to 12.4 dirhams, the highest since Oct. 26. The board approved buying back 10 percent of the company's shares.

Qatar Telecom, which provides phone services in 16 countries, gained 1 percent to 149.2 riyals, bringing the seven- day advance to 24 percent. The company's board recommended paying a full-year cash dividend of 10 riyals a share.

Du rose 3.2 percent, the most since Oct. 20, to 4.25 dirhams. Chief Executive Officer Osman Sultan plans to invest about $540 million in 2009 to take further market share from its rival Emirates Telecommunications Corp.

The following stocks also rose or fell in the region. Stock symbols are in parentheses after company names:

Al-Aman Investment Co. (ALAMAN KK) lost 4.6 percent to 168 fills. The Kuwaiti real-estate developer said third-quarter profit fell 43 percent to 1.6 million dinars ($5.9 million).

Aayan Leasing & Investment Co. (AAYAN KK) climbed 4.7 percent, the most in three weeks, to 224 fils. The Kuwaiti finance provider for the leasing of heavy equipment reported third-quarter profit rose 5.3 percent to 2 million dinars.

Commercial Bank of Qatar QSC (CBQK QD) gained 2.4 percent to 74.1 riyals. The country's second-largest lender by assets will raise 3.23 billion riyals ($887 million) by selling new shares to Qatar Investment Authority after cancelling a rights offer.

DP World Ltd. (DPW DU), the world's fourth-biggest port operator, climbed 5.6 percent to 38 cents after saying ``throughput growth'' at its consolidated terminals in the first nine months of the year increased 16 percent.

Mabanee Co. (MABANEE KK), the Kuwaiti construction company, dropped 1.2 percent to 850 fils after saying third-quarter profit declined 26 percent to 2.9 million dinars.

To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net

Last Updated: November 4, 2008 07:49 EST