Arab bourses vigilant as investors await midyear results

Jul 6, 2007, 14:07 GMT

Amman - Cautious optimism is expected to dominate Arab stock markets in the coming week as investors monitor the midyear results particularly of blue chip firms, analysts said Friday.

'I believe a mood of cautious optimism will be ruling at regional markets next week with traders' attention focused on the performance of listed firms, particularly leading companies, during the first half of the year,' Nizar Taher, deputy chief of brokerage at the Jordan Ahli Bank, told Deutsche Presse-Agentur dpa.

'In addition to the midyear results, the volume of liquidity will be the second moving factor at Arab bourses,' he said.

Taher pointed out that the Gulf bourses enjoyed a high degree of liquidity due to the huge surplus petrodollars accumulated by Saudi Arabia, Kuwait and the rest of Gulf Cooperation Council member countries.

'But apparently the level of activity at Gulf bourses is decided by the degree of confidence investors attach to trading in stocks,' he said.

Saudi shares dived to record lows at the beginning of this week, but recovered later, reflecting a cautious approach ahead of the publication of semi-annual results.

The Tadawul All Share Index (TASI) of the Arab world's largest bourse hit its lowest point since February 2005, but recovered later to close at 7,168.70 points that represents a 2.2-per-cent increase over last week's close at 7,011.16 points.

TASI is currently 9.6 per cent lower than the year's start, according to the weekly report of the Riyadh-based Bakheet Financial Advisors (BFA).

The fluctuation 'reflects how investors are cautious while they await the midyear corporate financial results for listed companies,' the report said.

'In addition, more investors are keeping away from the market' due to concerns that the results of the first six months could be disappointing, it added.

The BFA expected trades to be 'vigilant' awaiting the results of blue chip firms, which will decide the direction of the market in the next weeks.

Jordanian shares were steady this week, despite a 0.47-per-cent loss in the all-share price index of the Amman Stock Exchange on Thursday due to the forcible closing of positions at the end of the weak, Taher said.

The ASE benchmark price closed this week marginally higher at 5,775 points from 5,762 points last week, according to the market's weekly report.

'Speculation is currently the market's key moving factor pending the half-year results, particularly of leading companies,' Taher said.

Kuwait's KSE all-share price index jumped to a new record high of 12,207 points this week, winning 1.15 per cent from last week when the benchmark price closed at 12,068 points.

The Global Investment House attributed the vigorous performance of Kuwaiti shares to the expectations of good midyear results of Kuwaiti blue chip firms.

The unified all-share price index of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi gained 1.8 per cent this week, closing at 4,600 points up from last week's close at 4,520 points.

Egypt's Case 30 index, measuring the performance of the most active 30 firms, hit an all time high 8,167.7 points this week, buoyed by the performance of heavyweight firms, analysts said