Aug. 28 (Bloomberg) -- Oman’s benchmark stock index surged the most in six months, leading gains in the Middle East, as investors snapped up shares of Renaissance Services SAOG on bets this month’s drop was overdone given earnings prospects.
Renaissance Services, a provider of services to the energy industry, increased 7.7 percent, paring the slump for the month to 18 percent. The company uncovered financial fraud in one of its units. Oman Cables Industry SAOG rose the most in six months. The MSM30 Index climbed 2.1 percent, the most since March 1, to 5,702.51 at the 1 p.m. close in Muscat. The measure is down 1.8 percent this month. The Bloomberg GCC 200 Index rose 0.5 percent.
“Long- to medium-term investors are probably buying at these levels expecting improved performance in the upcoming year,” Kanaga Sundar, head of research at Gulf Baader Capital Markets Co. in Muscat, said about Renaissance. “We do expect earnings to come under pressure this year but the performance will improve next year.”
Renaissance may report 2012 profit of 30.5 million rials ($79 million), up from a projected 16.7 million rials this year, according to the mean estimate of five analysts on Bloomberg. BankMuscat SAOG maintained a “buy” recommendation on Renaissance on Aug. 25, with a share-price estimate of 0.91 rial. The company said Aug. 18 it was confident that the only fraud incident is one of $2.9 million involving a junior manager at the Topaz Group unit. Renaissance rose to 0.658 rial, the highest since Aug. 14.
Oman Cables, a producer of insulated household electrical wires and cables, climbed 7 percent to 0.784 rial.
Crude oil rose Aug. 26 after Federal Reserve Chairman Ben S. Bernanke said growth will resume and the central bank had tools to stimulate the economy. Oil for October delivery advanced 7 cents to settle at $85.37 a barrel on the New York Mercantile Exchange. The six-member Gulf Cooperation Council is home to about one-fifth of the world’s proven oil reserves.
Dubai’s DFM General Index gained 0.7 percent, Abu Dhabi’s measure rose 0.5 percent and Qatar’s QE Index increased 1.5 percent. Kuwait’s measure and Bahrain’s gauge were little changed. Egypt’s benchmark EGX 30 Index declined 0.6 percent. Saudi Arabia’s stock market is closed for the week due to an Islamic holiday.
Israel’s TA- 25 Index climbed 0.5 percent. The yield on the benchmark Mimshal Shiklit note due January 2020 fell 10 basis points, or 0.10 percentage point, to 4.58 percent, the lowest since Aug. 21.
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