Investors expect Sunday's trading across the Gulf Arab markets to be slow, with most bourses seen trading sideways to higher on slim volumes as year-end approaches.

'I believe there will be a continuation of an upward momentum this week, with less volatility,' says Mohamed Ali Yasin, chief executive at Shuaa Securities.

'Before end of year we should be seeing UAE index levels going back to the same levels before the debt standstill news broke on November 25.'

On November 25, Abu Dhabi was at 2,910 and Dubai index was at 2,093 levels. The news that government-owned holding company Dubai World would request an official standstill in November from creditors as it seeks to restructure a further $22 billion in debt repayments sent UAE markets plunging.

However, a swift recovery was seen after the firm's real estate unit Nakheel said it would repay bondholders $4 billion last week, boosting investor sentiment.

Bankers expect Dubai World to make a formal request for a standstill on some $22 billion debt at Monday's creditor meeting, but it could be more than a month before the lenders agree, bankers said on Friday.

'The meeting tomorrow is just the beginning, there will be long negotiations before we see any implications,' says Shuaa's Yasin.

Dubai-based traders do not expect high trading volumes ahead of Monday's meeting. However, market rumours may cause some selling pressure on the Dubai market.

In other Gulf markets, volumes on Saudi's benchmark are expected to remain low as investors sit on the sidelines in anticipation of Monday's budget, and keep cash in reserve ahead of planned IPOs in Q1 2010.

'Yesterday Saudi closed on a high, an upward momentum that is expected to continue,' says Yasin.

Banking stocks on the Qatar index could also see buyer interest, after the government said last week it will spend $900 million on buying a five percent stake in some of its local banks before the end of the year.

'We could see upside opportunities for banking stocks, Qatar Gas Transport, Industries Qatar and Qtel, as foreign institutional investors remain net buyers of Qatar,' says Ray Bencheikh assistant fund manager at Qatar National Bank.

'Volumes are expected to be low after the long holiday,' said Bencheikh.-Reuters