Dubai's bourse posted its highest daily gain since late January on Monday as investors scooped up shares of real estate and construction companies on hopes for increased dividend payouts.

The Dubai benchmark rose 2.9 percent to 4,984 points, its highest level since August 2008, while turnover more than doubled compared to the previous session.

Real estate developer Emaar Properties, whose shares rose 3.9 percent, and construction firm Arabtec, up 9.5 percent, contributed the most to the increase.

Both companies will hold annual shareholder meetings this month to discuss, among other issues, dividend payouts for 2013. Some investors are betting that the companies will end up paying more than initially suggested by their boards, said Sanyalak Manibhandu, manager of research at NBAD Securities.

"There are rumours that there will be different profit distribution," he said.

Emaar's shareholders will meet on Wednesday; its board has proposed paying a 15 percent cash dividend and issuing 10 percent bonus shares. Arabtec's shareholders will discuss a proposed 10 percent cash dividend and a 30 percent bonus share issue on April 30. Neither of the companies has officially announced any plans to review the proposed dividends.

The third biggest contributor to Dubai's jump was property developer Deyaar, whose shares rose 6.1 percent as they became open to investment by foreigners from outside the Gulf. According to bourse data, non-Gulf investors owned 0.4 percent of Deyaar's stock after the close on Monday; United Arab Emirates investors reduced their holdings to 94.4 percent from 95.1 percent at the same time.

Monday's surge brought Dubai close to the psychologically important mark of 5,000 points and increased year-to-date gains to 48 percent.

"I think we are still at the end, or at a fairly mature stage, of the rally which has been going on since the start of 2013," said Manibhandu from NBAD Securities.

"The culmination of the rally will be the upgrade of Dubai to emerging market status" by index compiler MSCI at the end of May, he added.

Analysts say the upgrade, which will also include Abu Dhabi and Qatar, may trigger profit-taking as many active funds have already taken positions in local stocks and the volume of inflows from passive funds - which are expected to buy on the eve of the upgrade - may be lower than hoped.

"It is hot and there is nothing to fuel the heat apart from high hopes, some of which are about to be dashed," Manibhandu said.

Abu Dhabi's index rose 1.0 percent to a fresh eight-year high of 5,192 points on the back of stocks that look likely to be included in the MSCI emerging markets index.

Abu Dhabi Commercial Bank rose 2.5 percent, National Bank of Abu Dhabi added 1.0 percent and First Gulf Bank climbed 0.9 percent.

Real estate developer Aldar Properties, also a likely MSCI index pick, added 4.5 percent after it announced three new projects worth a total of $1.4 billion on Monday and said it was looking at 20 more.

"Any bit of news is incrementally positive to the sentiment (towards UAE property stocks)," said Amer Khan, senior executive officer at Shuaa Asset Management.

"These are all names that attract significant retail interest which would be naturally driven by project announcements."

QATAR, SAUDI

Qatar's bourse also posted strong gains as its main index rose above resistance on its 2008 peak of 12,637 points and climbed 1.5 percent to 12,768 points, a level last seen in 2005.

Stocks in sharia-compliant companies continued to lead gains: the bourse's Al Rayan Islamic Index, which tracks them, rose 2.7 percent.

Sharia-compliant stocks started gaining earlier this month on expectations of large investments from Ezdan Holding Group, a firm established and chaired by members of Qatar's ruling Al-Thani family.

In March Ezdan, whose shares jumped 9.9 percent on Monday and have more than doubled in price this month, bought a stake of more than 20 percent in Islamic investment firm Islamic Holding Group. Investors expect it to make more sharia-compliant investments.

In Saudi Arabia, the main index retreated 0.2 percent from a six-year high reached on Sunday.

Shares in Saudi Electricity Co fell 1.5 percent after it reported a wider-than-expected net loss for the first quarter. It lost 913 million riyals ($243.4 million) during the quarter, compared to a loss of 657 million riyals in the same period of the previous year. NCB Capital had forecast SEC would have a quarterly net loss of 754 million riyals.

Shares in retailer Fawaz Abdulaziz Alhokair Co jumped 7.0 percent after it reported a 40 percent year-on-year increase in net profit for its fourth quarter to March 31.

The stock hit a new all-time high of 197.0 riyals, although at 190.8 million riyals, the profit missed the average forecast of three analysts polled by Reuters who had expected 230 million riyals.

The company also said it planned to pay a dividend of 3 riyals per share for the second half of its last financial year, and that its board had recommended doubling the company's capital to 2.1 billion riyals through a one-for-one bonus issue of shares.

MONDAY'S HIGHLIGHTS
DUBAI: The index rose 2.9 percent to 4,984 points.
ABU DHABI: The index climbed 1.0 percent to 5,192 points.
QATAR: The index added 1.5 percent to 12,768 points.
SAUDI ARABIA: The index edged down 0.2 percent to 9,618 points.
KUWAIT: The index rose 0.7 percent to 7,484 points.
BAHRAIN: The index climbed 0.5 percent to 1,392 points.
OMAN: The index slipped 0.09 percent to 6,835 points. - Reuters