Gulf stock markets looked set to have a firm bias on Wednesday on higher oil prices, while Abu Dhabi may once again outperform due to interest in Etisalat after the company announced plans to loosen ownership restrictions.

Global cues are modestly positive, with Brent crude up 8 cents to $64.53 a barrel early on Wednesday after settling 1.8 per cent higher on Tuesday.

This may support modest buying in the region. On Tuesday, Saudi Arabia had stabilised after six days of falls, suggesting investors were once again willing to buy blue-chips on dips after selling on disappointment over slow pace of foreign fund inflows into the country.

United Arab Emirates telecommunications operator Etisalat soared to its 15 per cent daily limit, at 13.80 dirhams, in Abu Dhabi on Tuesday after saying it would permit foreigners and local institutions to buy its shares, though it did not specify when the change would happen.

Valuations indicate there may be room for further gains; the gain left the stock with a forward price/earnings ratio of about 12.5 times, above Saudi Telecom at around 11 but cheaper than Qatar's Ooredoo at nearly 16.

Etisalat pulled Abu Dhabi’s stock index up 2.9 per cent to 4,755.60; it broke above its March and April peaks and also exceeded its 200-day average for the first time since last November, which was technically very positive.

A bullish right triangle formed by the highs and lows since mid-December now points the index up to last year's highs above 5,200 points in the long term.

Abu Dhabi’s breakout may siphon some money from Dubai, whose performance in recent days has been closely tied to volatile Amlak Finance. Amlak’s sharp pull-back on Tuesday, when it rose as much as 12.8 per cent in early trade but closed 3.1 per cent lower, suggests Dubai may have peaked for now.

But shares in Dubai-listed telecommunications operator du, which rose 4.6 per cent on Tuesday, may stay firm on speculation it could follow Etisalat in loosening ownership restrictions. At present, du’s shares can only be bought by individual investors and companies that are majority-owned by a UAE entity.

In Egypt, Qalaa Holdings could attract interest after saying it had signed agreements with Financial Holdings International to sell its stakes in several non-core units. Qalaa aims to close the deal in December 2015, reducing its consolidated debt by about 800 million Egyptian pounds ($105 million), it said.

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