Persian Gulf stocks gained, sending Qatar’s benchmark index up the most in three weeks, after six central banks cut the cost of emergency dollar funding for European banks and China reduced curbs on lending. Oil climbed.
Qatar National Bank SAQ (QNBK), the country’s biggest lender, rose to the highest in almost two weeks. Islamic bank Masraf Al Rayan increased for the third time this week. Qatar’s QE Index (DSM) added 0.8 percent, the most since Nov. 9, to 8,662.76, at the 1 p.m. close in Doha. The gauge (DFMGI) rose 1.2 percent this week. The Bloomberg GCC 200 Index (BGCC200) advanced 0.3 percent.
The Dow Jones Industrial Average jumped 4.2 percent yesterday, the most since 2009. The Federal Reserve, Bank of Canada, Bank of England, Bank of Japan (8301), European Central Bank and Swiss National Bank agreed to reduce the interest rate on dollar liquidity swap lines by 50 basis points and extend their authorization through Feb. 1, 2013. Euro-area finance ministers approved enhancements to their bailout fund yesterday.
“An improving backdrop to global markets is providing a tailwind to our markets,” said Ali Khan, London-based head of Middle East and North Africa Equities Sales at Royal Bank of Scotland Group Plc. “Recent headlines within MENA have been improving, such as in Egypt, including the recent $1.5 billion bond issuance” in the North African country, Khan said.
Egypt, rocked by protests ahead of this week’s parliamentary election, raised funds at yields lower than analysts estimated as investors flocked to the nation’s first sale of one-year dollar-denominated treasury bills. Qatar also sold $5 billion of dollar-denominated bonds this week, capping the best month for bond sales in the six-nation Gulf Cooperation Council in 13.
The MSCI Emerging Markets Index (MXEF) rallied 2.9 percent, extending a 2.1 percent gain yesterday, after China said it will cut the reserve requirement ratio for banks.
Crude oil for January delivery advanced as much as 0.6 percent to $100.99 a barrel. Gulf Arab oil exporters including the United Arab Emirates and Qatar supply about a fifth of the world’s oil.
Qatar, the world’s fastest-growing economy, and the U.A.E. may be raised to emerging market status at MSCI Inc. (MSCI) this month after the index provider delayed the decision in June.
“The subject of MSCI EM inclusion will remain in focus for U.A.E. and Qatar therefore both markets should be able to hold onto any recent gains,” RBS’s Khan said. Markets in the U.A.E. were closed for a national holiday today.
Qatar National increased 1.4 percent to 149.6 riyals, the highest close since Nov. 20. Masraf Al Rayan (MARK) rose 0.4 percent to 26.15 riyals.
Oman’s MSM 30 Index (MSM30) jumped 1.2 percent, the most since Aug. 28, and Kuwait’s gauge rose 0.4 percent. Bahrain’s BB All Share Index (BHSEASI) lost 0.5 percent. Saudi Arabia’s market was shut for the weekend.
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