Arab stocks gather momentum as investors restore confidence

Mar 19, 2010, 13:32 GMT

Amman - Arab stock markets extended gains this week as investors seemed to regain confidence and anticipate better performance for the first quarter of the year, financial analysts said Friday.

Reports about an imminent agreement between Dubai World and its lenders also helped to boost regional markets this week, they added.

'I believe both local and foreign investors are focusing attention again on Middle East markets, apparently encouraged by expectations of better performance in the first quarter of the year,' Wajdi Makhamreh, CEO of the Noor Investment brokerage, told the German Press Agency dpa.

'I think rising oil prices fuel this optimism, given the fact that they help to enhance the region's surplus petrodollars and ensure the availability of more funds that seekk investment outlets in stocks,' he said.

Makhamreh also detected a tendency by regional markets to 'return again to their independent course and lose psychological connection with global markets.'

Saudi shares extended gains this week amid reports that the Capital Market Authority intended to launch a stock market index fund by the end of month through which foreigners would be able to trade in Saudi stocks.

The Tadawul All Share Index (TASI) of the Arab world's largest bourse gained 1.7 per cent this week, closing at 6,674.41 points.

'Fresh liquidity also entered the market after banks eased credit restrictions and started to give loans with portfolios of stocks accepted as collateral,' Abdullah Bashen, director of Team One brokerage, said.

Jordanian shares also rallied for the second week in a row amid reports of expanding foreign demand and easing restrictions on bank credit to traders, Makhamreh said.

The all-share index of the Amman Stock Exchange went up 2.14 per cent this week, to close at 2,535 points, according to the ASE weekly report.

Kuwait's KSE all-share index shed 0.6 per cent, closing week at 7,414 points.

The United Arab Emirates stock exchanges of Dubai and Abu Dhabi were the scene for violent fluctuations this week that reflected concerns over the outcome of negotiations due to take place next week for rescheduling World Bank debts.

However, the benchmark price of the Dubai stock market closed in the green at 1,726 points, rising by 2.5 per cent on weekly basis. Abu Dhabi's all-share index closed week almost unchanged at 2,832 points.

'Speculation over the Dubai World debt deal dominated the UAE markets, with investors showing caution and preferring to wait to see what comes out next week,' Dubai-based analyst Khalid Darwish said.

Egyptian stocks were the main loser this week in the Arab world as investors came under pressure from ambiguity in news regarding the health of President Hosny Mubarak following the surgery he underwent 12 days ago in Germany.

Egypt's AGX index, measuring the performance of the market's 30 most active stocks, fell 2.3 per cent, closing week at 6,610 points.