0853 GMT - Shares in Egypt's Orascom Construction Industries rally 10 percent after Dutch-listed OCI NV received Egyptian regulatory approval to buy out shareholders.
The tender offers OCI NV shares or 255 Egyptian pounds in cash for each ordinary Egyptian share in the construction and fertilisers company; it will end on July 28.
OCI shares are now trading at 238 pounds, approaching the offer price. The 10 percent move is the market's one-day upward limit for shares.
Egyptian authorities initially blocked the tender because it may result in the delisting of OCI, the market's biggest stock, from Cairo. Their resistance had caused OCI shares to drop sharply as investors feared the offer might not go ahead.
The decision to let the tender proceed is seen by some as positive for the overall stock market, since it suggests authorities realise excessive intervention in the market could hurt investor confidence.
Cairo's index climbs 3.2 percent to 4,680 points, heading for its second straight gain since it slumped to a one-year low because of severe political instability.
0726 GMT - Qatar's blue chips help lift its index nearly 1 percent after the emir handed over power to his son in a smooth transition.
The index climbs 0.9 percent to 9,258 points, extending its 2013 gains to 10.8 percent.
"The message from the (outgoing) emir gave confidence and sent the right political and economic signals," says Yassir Mckee, wealth manager at Al Rayan Financial Brokerage. "Investors were a bit concerned about the transition."
No dramatic change is expected to economic and foreign policies, but new cabinet members will give indications of how the country is moving ahead with mega-projects in preparation for the 2022 soccer World Cup, he adds. This could help to improve market sentiment.
Qatar National Bank (QNB) rises 1.1 percent, Industries Qatar adds 0.6 percent and Qatar Telecom gains 1.5 percent.
The new leader, Sheikh Tamim, is expected to address the nation at 1500 GMT on Wednesday; there is some speculation that he could announce positive economic news, such as additional benefits for local citizens.
Other Gulf bourses are firm as bargain-hunters buy for a second session; Abu Dhabi's benchmark climbs 0.4 percent to 3,554 points. But Dubai and Kuwait are little changed.
0530 GMT - Qatar's bourse is likely to gain on Wednesday as it reopens after a one-day bank holiday during which the Gulf state's emir handed over power to his son, the crown price.
Analysts view the smooth transition of power as a modest positive for Qatari markets and the economy, and there is some speculation that the government could announce positive economic news or policies - perhaps financial benefits to local citizens - to mark the handover. The new leader, Sheikh Tamim, is expected to address the nation at 1500 GMT on Wednesday.
After a bout of profit-taking in the last few sessions, Doha's benchmark is still up 9.8 percent year-to-date, though trading volumes have begun tapering off across Gulf markets in a typical summer lull.
Shares in Commercial Bank of Qatar may draw interest after the lender signed a $100 million loan deal with Turkish telecommunications company Turk Telekom, a sign of its growing activity abroad.
The global backdrop for Gulf markets is slightly positive after Asian shares ended a four-day losing streak, following strong U.S. economic data and an assurance from China's central bank that it will provide liquidity if needed.
In Egypt, blue chip Orascom Construction Industries (OCI) may see increased buying interest after Dutch-listed OCI NV said it had received Egyptian regulatory approvals to buy out other shareholders in OCI in a tender offer that begins on Thursday.
The offer is in exchange for Dutch-listed shares in OCI NV or 255 Egyptian pounds in cash; OCI was last at 216 pounds, so the regulatory approval should see the stock rise towards that price.
The overall outlook for Egypt remains shaky, however, ahead of mass protests against President Mohamed Mursi expected on June 30. (Reporting by Nadia Saleem; Editing by Andrew Torchia)