Asian gains to support Gulf markets

Gains in Asian shares should support some Gulf Arab markets on Monday, but UAE stocks could face further losses as traders book profits from an early-year surge. Upbeat economic data lifted US markets to an almost four-year high last week and higher European stocks reflected signs of growing stability in the euro zone. Brent crude is holding above US$126 a barrel on Monday, with prices supported by continued concerns over supply disruption from Iran. A bullish oil market is usually positive for regional petrochemical stocks, with higher crude prices improving producers' margins. Turnover on Saudi Arabia's bourse hit a five-year peak on Sunday, reaching SAR18bn (US$4.80bn), as money poured in to lift the kingdom's benchmark to a new three-and-a-half year high. "We have very good visibility in terms of investments in Saudi Arabia, with government spending and capital expenditure... that's why a lot of money has shifted there," says Sebastien Henin, portfolio manager at The National Investor. Qatar's market is lacking short-term catalysts, while UAE bourses are seen extending losses as investors lock in recent gains. Dubai's index has fallen 5.3 percent since March 5's 16-month high. Dubai's Arabtec said it has no plans to renew talks with Abu Dhabi state fund Aabar Investments about a taking a stake in the builder because its funding needs have eased. The Abu Dhabi government-owned fund recently raised its stake in Arabtec to 5 percent, fueling speculation it may be interested in a larger share. "They have to time the way they will increase their stake but 5 percent looks too small. Their portfolio usually consists of decent stakes in companies," Henin adds.