* Highest Dubai turnover since spike on June 3
* Retail investors bet on small-caps
* Rise in land transaction fee doesn't hurt property stocks
* Saudi large-caps sold before Q3 earnings
* Egypt fails to confirm break of technical resistance
By Nadia Saleem
DUBAI, Sept 29 (Reuters) - Dubai's shares rose to theirhighest level in almost five years in heavy trading on Sunday asretail investors bet on small-caps ahead of third-quarterearnings, while other regional markets were mixed.
Dubai's benchmark advanced 1.2 percent to 2,771points, its highest finish since November 2008, takingyear-to-date gains to 70.8 percent. Turnover surged to 1.3billion dirhams ($354 million), the biggest daily value since aspike on June 3.
"We have a lot of catalysts - real estate is doing well, theExpo 2020 decision is coming up and later, people will startgearing up for the MSCI upgrade," said Amer Khan, fund managerat Shuaa Asset Management. "Political risk has dissipated andthe outlook is positive."
Sunday's rise suggested a break above the August peak of2,762 points, though another daily close will be needed forconfirmation. A double bottom formed by lows dating back to 2009points the index up to the 3,500-point area in the long term.
The World Expo committee will make a decision on Nov. 27 onwhether or not Dubai will win the rights to host the world'sfair in 2020. Index compiler MSCI upgraded the United ArabEmirates and Qatar to emerging market status earlier this year,which will bring in fresh foreign funds when it takes effect inJune 2014.
Khan said that despite Dubai's hefty 2013 gains, the marketwas not expensive in terms of valuations because of the positivecatalysts. Analysts are expecting modest profit growth for thethird quarter, however, with the hot summer having a dampeningeffect on some sectors.
Small-cap Gulf Navigation surged 15 percent onSunday, leaving it up 82.1 percent since the firm's announcementof plans to sell some ships and raise capital a week ago. Itaccounted for more than a third of total shares trading.
Thursday's news that Dubai will double its land transactionfee to 4 percent did not dampen the real estate market orproperty stocks significantly.
"Even if the fee is increased by the DLD, in the globalcontext, purchase costs will still be relatively low," propertyconsultants Knight Frank said in a report.
In Saudi Arabia, the index declined 0.4 percent,down for a fourth consecutive session to hit a two-week low.
Investors sold most large-cap stocks ahead of third-quarterearnings. Analysts and investors are expecting most earningsgrowth to come from sectors that rely on domestic demand, whichbenefits from a strong economy and growing population.
The petrochemical sector slipped 0.5 percent; SaudiBasic Industries Corp (SABIC) retreated 0.3 percent.Heavyweight Al Rajhi Bank shed 0.6 percent.
"We continue to remain bullish on consumer and retailplays," said John Sfakianakis, chief investment strategist atSaudi investment firm MASIC. "The overall sentiment will dependon how well petrochemical and banking names will do. I'mslightly optimistic on some banks but not expecting stellarresults."
Tight net interest margins continue to weigh onprofitability at Saudi banks and are limiting growth despitestrong lending growth, he added.
Elsewhere, Qatar's measure recovered from a two-weeklow and climbed 0.5 percent as bargain-unters returned. Themarket fell 2.6 percent last week as investors cashed out toparticipate in an expected upcoming new listing of a QatarPetroleum unit.
In Egypt, Cairo's benchmark index slipped 0.6percent to 5,667 points, easing off a seven-month high. Itfailed to confirm a break of chart resistance at 5,682 points,the August peak.
The market was little moved by comments from EgyptianForeign Minister Nabil Fahmy; he said on Saturday that thetransitional phase of government should end "by next spring",replacing leaders appointed after the army ousted electedpresident Mohamed Mursi in July.
Egyptians joined foreigners as net sellers, while regionalArabs were net buyers, according to bourse data.
* The index rose 1.2 percent to 2,771 points.
* The index slipped 0.4 percent to 7,950 points.
* The index climbed 0.5 percent to 9,626 points.
* The index gained 0.3 percent to 7,809 points.
* The index slipped 0.6 percent to 5,667 points.
* The index eased 0.04 percent to 3,837 points.
* The index gained 0.3 percent to 6,677 points.
* The index declined 0.2 percent to 1,195 points.
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