MIDEAST STOCKS-Gulf mostly firm; Egypt regains some ground

Most Gulf bourses firmed on Tuesday as fresh merger speculation moved stocks in Abu Dhabi, though Saudi Arabia's stock market lost steam.

A trader watches his monitor at the Egyptian stock exchange in Cairo April 1, 2014.

A trader watches his monitor at the Egyptian stock exchange in Cairo April 1, 2014.

REUTERS/Mohamed Abd El Ghany
* Abu Dhabi's NBAD retreats, snapping two days of big gains

* But UNB, ADCB jump on speculation about another merger

* Saudi loses steam as Brent oil slips back below $50

* Kuwait's Americana extends rise towards acquisition price

* Black market currency moves worry Egypt

By Celine Aswad

DUBAI, June 21 (Reuters) - Most Gulf bourses firmed on Tuesday as fresh merger speculation moved stocks in Abu Dhabi, though Saudi Arabia's stock market lost steam as oil prices fell back. Egypt's bourse partially recovered from sharp losses but remained technically bearish.

National Bank of Abu Dhabi pulled back 1.7 percent after surging 20 percent in the previous two days on news of its merger talks with First Gulf Bank . FGB closed flat.

But Union National Bank added 4.6 percent after Arqaam Capital said in a note that after the proposed merger between NBAD and FGB, "we expect UNB to be next".

It said Abu Dhabi Commercial Bank might offer a substantial premium to UNB shareholders in a merger; ADCB shares jumped 2.2 percent on Tuesday.

Dubai's index added 1.1 percent with momentum accelerating in the final hour of trade. The benchmark was buoyed by mid- and large-cap stocks; Dubai Parks and Resorts climbed 2.1 percent. But trading volumes were generally small.

"Turnover has been low, and markets will continue to lack liquidity given the month of Ramadan and the summer holiday overlap, which usually sees shrinking volumes," said Marwan Shurrab, fund manager at Dubai-based Vision Investment.

In its final hour of trade, Riyadh's index gave up earlier gains as Brent crude prices fell below $50 a barrel. The index closed down 0.1 percent as Saudi Arabia Fertilizers (SAFCO) slipped 1.6 percent.

But real estate developer Knowledge Economic City gained 0.7 percent after it sold a plot of land for 22.8 million riyals ($6.1 million) in Medina to International Medical Center, an affiliate of Fitaihi Holding Group , which plans to build a hospital on the site. Fitaihi shares fell 1.2 percent.

In Kuwait, Kuwait Food once again rose by its daily limit, adding 4.4 percent to 2.400 dinars in very thin trade; a Dubai investment group agreed at the weekend to buy a majority stake in the firm for 2.650 dinars a share, and will then make an offer for the remaining shares at that price. Kuwait's index edged up 0.1 percent.

In Cairo, the main stock index rebounded 0.7 percent to 7,251 points but closed well off its session high. On Monday, the index broke below major support on the April and May lows of 7,276-7,327 points.

"Today the market witnessed a technical rebound, driven by traders who were fishing for stocks with strong technical buy signals," said Ibrahim al Nimr, head of technical analysis at Cairo's Naeem Brokerage.

Global Telecom Holding jumped 4.6 percent and Orascom Telecom , which had plummeted 6.5 percent since last week, added 1.8 percent.

But Nimr added that the market was expected to remain in a downtrend, heading for psychological support at 7,000 points. The macroeconomic picture is murky as the 1 percentage point interest rate hike by the central bank on Thursday - which was greater than expected - did little to steady investors' concern about a further devaluation of the currency.

"The gap between the black market rate and the official rate is widening, which raises doubt about the ability of the central bank to attract dollars into the country," said Nimr.

The black market rate was about 11.05-11.08 Egyptian pounds to the U.S. dollar this week against last week's 10.95. The official market rate is 8.88.



* The index rose 0.5 percent to 4,503 points.


* The index gained 1.1 percent to 3,343 points.


* The index edged down 0.1 percent to 6,553 points.


* The index climbed 0.7 percent to 7,251 points.


* The index rose 1.0 percent to 9,919 points.


* The index edged up 0.1 percent to 5,438 points.


* The index added 0.1 percent to 5,788 points.


* The index was flat at 1,115 points.

< (Editing by Andrew Torchia/Mark Heinrich) ((celine.aswad@thomsonreuters.com; +971 562 247 653 Reuters Messaging: celine.aswad.thomsonreuters.com@reuters.net))

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