* Saudi petchems surge to 17-month high
* Saudi Kayan swings to Q3 profit
* Global rally boosts regional shares after holiday
* Dubai index at new 5-yr high on retail buying
By Nadia Saleem
DUBAI, Oct 20 (Reuters) - Saudi Arabia's petrochemicalshares led a bourse rally on Sunday as earnings boostedsentiment, while most regional markets also rose as they resumedtrading after a week-long holiday and reacted positively to theU.S. averting a debt default.
Shares in Saudi Kayan Petrochemical surged 9.6percent to a nine-month high after it swung to a third-quarterprofit.
The company made a profit of 43.3 million riyals ($11.55million), compared to a net loss of 178.4 million riyals in thesame period last year, according to a bourse statement.
Parent firm Saudi Basic Industries Corp (SABIC) jumped 5.4 percent, helping lift the sector's index by5 percent to a 17-month high.
"So far the petrochemical results have been better thanexpected - the biggest surprise is Kayan, which reported itsfirst ever profit after eight quarters of operations," said IyadGhulam, petrochemical analyst at NCB Capital. "It's mainly fromefficiencies - they've managed to reduce cost of operations."
"The read across on Sabic from the petchem earnings so faris they might report better than expected results due to higherprices for the third quarter. We'll see positive surprises onall firms," he added.
The Saudi index rose 1.9 percent to a two-monthhigh, breaking out of a sideways trend.
Shares in heavyweight Al Rajhi Bank dropped 1.9percent after it reported that its third-quarter net profit fell8.1 percent year-on-year. The figure was also 17 percent lowerthan analysts' estimate.
In Dubai, the measure rose 2.8 percent to itshighest level since November 2008 on renewed buying by retailinvestors supported by a positive global backdrop.
Global stock markets climbed to five-year highs on Friday asinvestors bet the U.S. Federal Reserve would extend its stimuluspolicy well into 2014, while accelerated growth in China'seconomy also lifted equity and commodity markets. A last-minutedeal by U.S. lawmakers last week to avert a debt default hasalso improved the mood.
"We were closed for the week during which the U.S. resolvedits debt ceiling issue, at least temporarily, and the governmentreopened. We're playing catch-up to the spike in major markets,"said Sanyalaksna Manibhandu, senior analyst at NBAD Securities.
Expectations of Dubai winning the bid to host the World Expo2020 are also supporting local sentiment. A win would spurfaster infrastructure development and some optimism has alreadybeen priced into equity and property markets.
The winner is expected to be announced on Nov. 27.
"In the absence of anything bad, we should continue to go upat least until the results of Expo 2020 (selection)," Manibhandusaid.
Abu Dhabi's benchmark slipped 0.3 percent afterhitting an intraday two-month high as some booked profits. Themarket is up 45.6 percent in 2013.
Elsewhere, Kuwait's index rose 1.8 percent, Qatar climbed 0.3 percent and Oman added 0.5 percent.
In Egypt, the benchmark index advanced 1 percent toa 33-month high. It is also now above the key psychologicallevel of 6,000 points.
"We're affected by regional and global markets," saidMohamed Radwan, director of international sales at PharosSecurities in Cairo. "There's retail manipulation on mid-capsbut the sentiment is positive in general."
Shares in Orascom Telecom Media and Technology Holding and Arabia Investments Development jumped3.2 and 6.7 percent respectively.
* The index climbed 1.9 percent to 8,133 points.
* The index rose 2.8 percent to 2,910 points.
* The index slipped 0.3 percent to 3,830 points.
* The index rose 1.0 percent to 6,049 points.
* The index gained 0.5 percent to 6,705 points.
* The index advanced 1.8 percent to 7,906 points.
* The index edged up 0.3 percent to 9,752 points.
* The index climbed 0.8 percent to 1,204 points.
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