Petrochemicals sent Saudi Arabia's stock benchmark Tadawul All Share Index (TASI) to a two-week high on Wednesday, rising 0.86 percent to 6,158.99 points, tracking rising oil prices. But volumes may be too low for these gains to signal the start of a more sustained rally. Benchmark US crude oil futures for October rose $1.99, or about 2.8 percent to settle at $73.91 a barrel. London ICE Brent crude futures rose $1.77 to end at $76.35. Most other Middle East market also advanced, with Dubai ending a three-day losing streak and Qatar reaching a three-month high. Saudi Basic Industries Corp (SABIC) rose 1.5 percent as Saudi Arabia's petrochemicals index gained 1.4 percent. “This is purely linked to oil,” said Saleh Al-Onazi, vice-president of principal investment at Swicorp in Riyadh. Saudi banks also gained. Samba Financial Group and Al-Rajhi Bank added 1.2 and 0.7 percent respectively. “Banks are up because they have low exposure to international markets,” said Onazi. “There is usually a rally after Ramadan, so maybe some people are taking speculative positions now ... we are into a fourth month of trading between 6,000 and 6,300 points and volumes are setting new lows.” Elsewhere in the region, Qatar benchmark rose 0.3 percent to 7,251 points. Dubai benchmark rose 0.2 percent to 1,487 points. Egypt measure climbed 1.3 percent to 6,493 points. Abu Dhabi index fell 0.3 percent to 2,492 points. Kuwait index dropped 0.2 percent to 6,678 points. Oman index edged up 0.05 percent to 6,260 points. Bahrain index rose 0.3 percent to 1,423 points. These conditions make an imminent rally unlikely, Onazi said, but Musa Haddad, head of MENA equity desk at National Bank of Abu Dhabi, was more bullish, forecasting Middle East markets would outperform their global peers from now until year-end. “We could soon see a flow of funds from international investors coming into MENA markets, so now is a good time to start building positions,” said Haddad. He predicted foreign investors would rotate cash into underperforming Middle East markets as world and emerging equities stumble. “It's cyclical as international investors move money from one region to another,” said Haddad. “We've traded sideways for a long time on low volumes, but a shift is slowly happening and should be accelerated after Ramadan.” Dubai's du rose 4.3 percent to AED2.18, the telecom operator's highest close since June 22. “Du, although a defensive play, has shown some good momentum,” said Haddad. “It has broken resistances at 2.11 and 2.16 and could reach 2.24.” Abu Dhabi National Energy Co (TAQA) fell 2.5 percent after its former chief executive sued the firm. Orascom Telecom rose 1.5 percent. The board of Russian telecoms group Vimpelcom Ltd has provisionally approved the purchase of Italian mobile operator Wind and a stake in Orascom Telecom, an Russian newspaper reported. Qatar National Bank climbed 1.6 percent and Doha Bank added 2 percent, helping Qatar's index rise for the 12 session in 13. Banks have been the prime target for traders during Ramadan and QNB is the sector leader, so it's no surprise to see the stock appreciate.
