published Aug 28th 2016, 5:29 am, by Filipe Pacheco

(Bloomberg) —
Saudi Arabian stocks led gains across most Gulf equities as an advance in the price of oil helped offset investor caution over the timing of U.S. interest-rate increases.

Saudi Arabia’s Tadawul All Share Index rose 1.2 percent at 1:07 p.m. in Riyadh, heading for its first increase in six days. Qatar’s QE Index added 0.4 percent. The Bloomberg GCC 200 Index of the largest and most-liquid shares in the six-nation Gulf Cooperation Council climbed 0.5 percent, poised to end a seven-day retreat.

Brent crude, the region’s main source of revenue, rallied at the end of last week partly on speculation that informal discussions among members of the Organization of Petroleum Exporting Countries will lead to action to stabilize the market. That’s helping traders in the GCC overcome anxiety about an increase in U.S. borrowing costs that Federal Reserve Vice Chairman Stanley Fischer said could come in September, potentially trimming appetite for emerging-market assets.

“The oil situation will top rate-hike concerns for the region, giving some room for a rebound in stocks in the short term, mostly in Saudi Arabia,” said Saleem Khokhar, the Abu Dhabi-based head of fund management and equities at the asset-management group of National Bank of Abu Dhabi PJSC, the United Arab Emirates’ second-biggest bank. “Any indication that an output freeze is underway will be important. We’ll also see some major players returning from holidays, and we expect a normalization of volume due to that.”

Cheap Saudi

Saudi stocks are recovering from their cheapest level compared with emerging-market peers in about five years, according to data compiled by Bloomberg. Of the 174 shares making up the benchmark index, 158 gained. Al Rajhi Bank contributed most to the advance with a 2.1 percent increase, followed by cement producer Saudi Cement Co. and real-estate developer Jabal Omar Development Co.

The kingdom intends to sell at least $10 billion in bonds as early as in October, people with knowledge of the matter said last week. Meanwhile, the initial public offering of Saudi Aramco remains on track, according to Saudi Arabia’s Energy Minister.

In Abu Dhabi, Dana Gas PJSC, a producer of natural gas in Egypt, Iraq and the U.A.E., dropped 1.8 percent. The company’s chief executive officer told Bloomberg Television it may seek to roll over some of its $700 million Islamic bonds maturing next year. Abu Dhabi’s ADX General Index declined 0.4 percent.

Dubai’s DFM General Index fell less than 0.1 percent. Kuwait’s SE Price Index and Bahrain’s BB All Share Index both retreated a third day, slipping 0.3 percent and 0.6 percent respectively. Oman’s MSM 30 Index lost 0.2 percent.

To contact the reporter on this story: Filipe Pacheco in Dubai at fpacheco4@bloomberg.net To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net Matthew Kalman

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