UAE stock markets surged on Monday because of optimism towards fourth-quarter earnings, while Qatar booked its longest winning streak in over three years as it rose above 11,000 points for the first time since 2008.
Property shares led gains in Dubai, pushing the main index up 1.3 per cent to a new five-year high. Union Properties surged 9.6 per cent.
Shares in Shuaa Capital climbed 4.0 per cent after the investment bank swung to a profit in the fourth quarter of 2013 and for the full year. It made a full-year net profit of Dh2.8 million ($769,000), compared to a loss of Dh59 million in 2012.
"People are actively looking at Q4 numbers and dividends; Shuaa came out with a profit for the first time in years and that's being seen as a positive," said Sanyalaksna Manibhandu, senior analyst at NBAD Securities. "You might be seeing a little bit of over-enthusiasm."
Manibhandu said some UAE banks might book provisions in their fourth-quarter results to allow for the possible cost of meeting new regulations. The UAE's central bank issued rules in late 2013 on banks' exposure to government-related entities and residential mortgages.
Abu Dhabi's index rose 0.9 per cent, also hitting a five-year high.
In Qatar, the index gained 0.9 per cent to 11,020 points, breaking the 11,000-point level for the first time in five years. The market rose for a tenth consecutive trading day, its longest winning streak since November 2010.
Qatar is the best-performing regional market so far this year with a gain of 5.2 per cent. Foreign institutional investors have been net buyers, according to bourse data.Investors are positioning for earnings growth and dividends, which are among the highest in the region, and also ahead of MSCI's upgrade of Qatar to emerging market status, which will be implemented in May. Qatar is expected to see an inflow of about $500 million from funds benchmarked against MSCI's emerging market index.
In Saudi Arabia, losses in the petrochemical sector overshadowed gains in some banks. Riyad Bank surged 4.7 per cent to its highest since September 2008, continuing a rise that began on Wednesday when it posted a 27.2 per cent jump in fourth-quarter net profit, beating forecasts.
"People are looking at Riyad as a long-term play, given the results and solid dividends," said John Sfakianakis, chief investment strategist at Saudi investment firm MASIC."The market is differentiating between the banks in reaction to the results. The private sector credit growth is slowing down, which is going to have a bit of an impact in 2014."
Saudi British Bank edged down 0.5 per cent after posting an estimate-beating net profit rise of 20 per cent.
Banque Saudi Fransi fell 2.3 per cent to a three-week low of 33.70 riyals after it posted a surprise 66 per cent slump in fourth-quarter profit, citing higher operating expenses and missing analysts' forecasts by a big margin.
"Banque Saudi Fransi surprised negatively today, which we think is the result of a much higher provisioning at first look," said Asim Bukhtiar, head of research at Riyad Capital.
He added that the impairments were probably due to the bank's exposure to the construction sector, which is seeing a slowdown in projects because of a labour shortage. "The construction sector is going through some difficult times and if banks have been lending to them, they will see an impact. It takes one or two banks to recognise provisions exposure, and others will follow."
However, Banque Saudi Fransi shares ended well off their intra-day low of 32.50 riyals, and NCB Capital said it remained positive on the stock as it believed provisions would not be repeated at such high levels.
The Saudi petrochemical shares index slipped 0.4 per cent, underperforming the main index, which was flat.
Elsewhere, shares in major Omani construction firm Galfar Engineering fell 3.2 per cent, but recovered most of the day's losses, after two executives of the company were convicted in a corruption case. The stock saw its highest daily trading volume since December 2007.
DUBAI: The index rose 1.3 per cent to 3,550 points.
ABU DHABI: The index climbed 0.9 per cent to 4,458 points.
SAUDI ARABIA: The index eased 0.03 per cent to 8,712 points.
QATAR: The index rose 0.9 per cent to 11,020 points.
OMAN: The index slipped 0.3 per cent to 7,137 points.
KUWAIT: The index retreated 0.2 per cent to 7,629 points.