Mideast Shares Advance

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Place:Dubai

Story:Mideast shares advance

Middle East shares rose, sending Dubai’s measure up the most in two weeks, as U.S. politicians began a fresh attempt to reach an agreement on raising the country’s debt limit two days before a default deadline.

Emaar Properties PJSC, the developer of the world’s tallest skyscraper, gained 2.1 percent and Dubai Islamic Bank PJSC rallied the most in three months as second-quarter profit rose 10 percent. The DFM General Index climbed 0.8 percent, the most since July 13, to 1,517.58 at the 2 p.m. close in Dubai. The measure was little changed in July. The Bloomberg GCC 200 Index rose 0.3 percent at 2:17 p.m. in Riyadh after slipping as much as 0.3 percent earlier.Egypt’s EGX 30 Index gained 0.4 percent and Israel’s TA-25 index fell 1 percent.

Reports that “there is a preliminary agreement on a deal between President Barack Obama and the Republicans” helped push up stocks, said Samer Darwiche, a financial analyst at Gulfmena Investments in Dubai.

Emaar advanced the most since July 3 to 2.88 dirhams and Dubai Islamic jumped 3 percent, the most since April 20, to 2.06 dirhams. Net income at the United Arab Emirates’ biggest lender complying with Shariah rules increased to 331 million dirhams ($90 million).

Qatar’s QE Index rose 0.3 percent and Saudi Arabia’s Tadawul All Share Index gained 0.7 percent after tumbling 1.4 percent yesterday.Kuwait’s SE Price Index slipped 0.1 percent and Bahrain’s BB All Share Index fell 0.5 percent, while Abu Dhabi’s ADX General Index decreased 0.3 percent.Oman’s MSM 30 Index dropped 0.7 percent.

Ripples

Positivity in the market, led by the U.S.debt limit agreement, is definitely good news.

The agreement reached by President Barack Obama and congressional leaders late Sunday would raise the governments debt limit and cut spending by around $2.4 trillion.

S&P last week signaled that it would take a deficit-reduction agreement of around $4 trillion, along with convincing signs that it could be enforced to affirm its AAA rating on the United States. A lower rating could raise the governments borrowing costs.

The debt agreement would lead to a $2.4 trillion rise in the debt ceiling in two stages while making for just shy of $1 trillion in spending cuts over 10 years. A special panel of lawmakers must find a further $1.5 trillion of deficit cuts through reforms of entitlement spending and the tax code.

The agreement rallied equity markets around the world, with Asian and European stock indexes rising and U.S. stock index futures pointing to a sharply higher start for Wall Street.

Sources: sfgate, marketwatch

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