* Saudi petrochemicals lead gains
* U.S. Congress vote on suing Saudi has little impact
* But some analysts see long-term problem
* UAE markets follow global bourses higher
* Egypt's Orascom Construction rises on buy-back price
By Celine Aswad and Andrew Torchia
DUBAI, Sept 29 Saudi Arabia's stock market
rebounded on Thursday on the back of petrochemical shares, which
rallied in response to OPEC's deal to restrain oil output, but
the bourse posted a big weekly loss because of government
Petrochemical firms, their profit margins closely tied to
oil prices, recovered after Brent oil surged above $48 a
barrel overnight on the OPEC deal in Algeria. The largest
petrochemical producer, Saudi Basic Industries, gained
This encouraged buying back of a range of stocks and the
insurance sub-index, which had seen many of its
constituents drop their 10 percent daily limits in recent days,
rebounded 2.4 percent. BUPA Arabia, the largest
medical insurance provider, jumped 4.1 percent.
The overall Saudi market index closed 1.6 percent
higher but it was down 5.5 percent for the week, hit by
Monday's announcement of cuts to civil service bonuses and
allowances as the government grapples with a huge budget
"The stock market was dragged down by a wave of heavy
selling, taking many shares to multi-year lows, so technically
it was oversold," said Mohammad Al-Shammasi, chief investment
officer of Riyadh-based Derayah Financial.
A monthly Reuters poll, published on Thursday, found Middle
East fund managers had become negative on balance towards Saudi
Arabian equities for the next three months because of the
There appeared to be little impact on the market from news
that the U.S. Congress overwhelmingly rejected President Barack
Obama's veto of legislation allowing relatives of victims of the
Sept. 11 attacks to sue Saudi Arabia. Any lawsuits could take
years to wind their way through U.S. courts, with uncertain
prospects for success.
Nevertheless, the Saudi riyal fell moderately in the foreign
exchange forwards market and credit default swap prices edged
up. Some analysts said the legislation could become a
significant problem for Riyadh in the long term.
"Investor sentiment is likely to be impacted as this opens
the door to uncertainties in U.S.-Saudi relations that cannot be
resolved at the executive arm of the government," said Raza
Agha, chief Middle East economist at VTB Capital.
"Previous issues always had the potential to be resolved
through diplomacy - this now means there are potential legal
challenges ahead for Saudi Arabia, which the White House and
Riyadh cannot address via talks."
Other Gulf markets followed global shares higher in the wake
of the OPEC deal. Dubai's stock index closed 0.6
percent higher with DXB Entertainments, formerly known
as Dubai Parks and Resorts, adding 0.6 percent and
Emaar Properties gaining 1.4 percent.
The two largest listed shares in Abu Dhabi helped
carry the index up 0.6 percent; First Gulf Bank rose
0.9 percent and Etisalat added 0.8 percent.
In Qatar, the main index ended 0.3 percent lower as
Qatar National Bank, which had led advances in the
first hour of trade, slipped 0.1 percent. But the index rose 0.6
percent over the week.
Egypt's main index fell 0.3 percent as a little
over half of traded shares declined. Private equity firm Qalaa
Holding dropped 4.6 percent and the largest listed
bank, Commercial International Bank. lost 1.7 percent.
But Orascom Construction climbed 1.1 percent to
71.05 Egyptian pounds after the company set the price for its
buy-back of 1 million Cairo-listed shares at 74.05 pounds.
* The index gained 1.6 percent to 5,623 points.
* The index rose 0.6 percent to 3,474 points.
* The index climbed 0.6 percent to 4,476 points.
* The index edged down 0.3 percent to 7,881 points.
* The index fell 0.3 percent to 10,435 points.
* The index rose 0.7 percent to 1,150 points.
* The index slipped 0.1 percent to 5,398 points.
* The index was flat at 5,726 points.
(Editing by Alison Williams)