Saudi Arabia’s Tadawul All-Share Index rebounded 2.4 percent to 6,648 points Wednesday, 55 points below technical resistance on its July peak. 
Ninety-five percent of traded shares advanced.
All but one petrochemical producer rose with Saudi Basic Industries Corp. (SABIC) adding 2.1 percent as Brent oil futures traded over $46 a barrel.
Banking shares, which lost their footing over the last two sessions on profit-taking, bounced back with bellwether National Commercial Bank closing 2.5 percent higher.
The Saudi index is now up 19.5 percent over the last 30 days but still down 3.8 percent year-to-date. Al-Rajhi Capital said in a note that the “best of the rally seems behind us,” and suggested erring on the side of caution.
“Investors are likely to be better off by partially booking profits, as the downside risks are getting higher with lack of visible triggers in the short term. Some upcoming events like the OPEC meeting and Saudi budget may cause heightened market volatility whereas the fourth quarter earnings will likely witness the impact of recent austerity measures.”
Abu Dhabi bank shares surged on Wednesday because of renewed speculation that the government might merge more banks as part of an efficiency drive, while other regional markets rebounded, encouraged by strong global bourses and oil prices.
The Abu Dhabi index jumped 2.6 percent, its largest single-day gain since June, but trading volume continued to decline from a seven-month peak hit earlier this month.
Quoting unnamed sources, Bloomberg reported Abu Dhabi was considering more financial sector mergers after First Gulf Bank and National Bank of Abu Dhabi announced earlier this year that they planned to merge in the first quarter next year. FGB shares closed 2.6 percent higher and NBAD shares added 1.5 percent.
Union National Bank surged 12.3 percent and Abu Dhabi Commercial Bank jumped 5.8 percent on speculation they might form the next merger.
Officials at the banks and in the government were not available to comment, though several bankers familiar with the industry told Reuters that formal talks were not under way and the idea of any merger was still in very preliminary stages.
A UNB-ADCB merger would create the United Arab Emirates’ third biggest bank and “offer a better footing for ADCB to compete with the bigger players as underwriting capacity increases significantly,” Arqaam Capital said in a note.
Abu Dhabi Islamic Bank climbed 4.7 percent after Bloomberg said it could be merged with Al Hilal Bank. Bank officials could not be reached for comment and Bloomberg said it was possible that none of the potential mergers would proceed.
Blue chips led Dubai’s main stock index 2.1 percent higher with Emaar Properties gaining 2.8 percent and Dubai Islamic Bank adding 2.4 percent.
Positive third-quarter earnings from leading companies helped Egypt’s main index bounce back 3.4 percent, following two sessions of losses.
Orascom Telecom soared 11.5 percent after reporting a net loss attributable to shareholders of 54.2 million Egyptian pounds ($3.5 million) versus a loss of 3.85 billion pounds in the prior-year period.
El Sewedy Electric jumped 10 percent after posting a profit of 720.7 million pounds, a 153 percent jump.
Shares in Egypt have soared 29 percent since the central bank floated the currency on Nov. 3, easing concern about shortages of US dollars.
Exchange data showed foreign investors remained net buyers of Egyptian shares on Wednesday, as they have been since the float, though net purchases slowed further to $4.8 million.
Deputy finance minister Ahmed Kouchouk said on Wednesday that Egyptian authorities were happy with the outcome of the float and that inflows of foreign exchange into the banking system had totalled $1.5 billion since then, 10 to 15 times the size of weekly inflows previously.

Source: Arab News