Arab stocks close week higher on global market gains

Jul 30, 2010, 13:44 GMT

Amman - Arab stock markets rallied this week, drawing momentum from global market gains, better world recovery outlook and stable oil prices, financial analysts said Friday.

They expected Arab markets to extend gains in the coming weeks in response to improving business sentiment in the United States and Germany and the resulting positive impact on the Wall Street and other key world stock markets.

'I believe Arab stock markets are in a consolidation phase which paves the ground for further gains, given the rally at global markets and the jump in business sentiment in the world's major economies,' Nizar Taher, chief of brokerage at the Jordan Ahli Bank, told the German Press Agency dpa.

He said that oil prices, which appeared to have stabilised at over 75 dollars a barrel over the past couple of weeks, will help regional markets, particularly in the Gulf region, to score fresh gains.

However, Taher and other Arab analysts believe that the liquidity crunch sill represented the key factor that impeded Arab stock markets from catching up with world bourses.

Saudi stocks scored fresh gains at the start of the week, but dipped later due to profit taking.

The Tadawul All Share Index (TASI) of the Arab world's largest stock exchange, gained 2.9 per cent on a weekly basis, closing at 6,266.81 points.

'I believe TASI has established a strong base over the 6,000-point level,' Saudi analyst Tareq Madi said.

'The basic weakness remains in the liquidity shortage which is a phenomenon shared more or less by all Arab stock markets,' he added.

Jordanian shares rebounded this week, reflecting improving liquidity and foreign buying, Taher said.

The all-share index of the Amman Stock Exchange gained 1.17 per cent this week, closing at 2,334 points, according to the ASE weekly report.

Kuwaiti shares also closed in the green this week due to improving demand for blue chips, analysts said.

Kuwait's KSE all-share index gained 1 per cent this week, to close at 6,654 points.

United Arab Emirates stocks were volatile this week against the background of Dubai World debt concerns, analysts said.

The benchmarks of the Dubai and Abu Dhabi stock exchanges shed 1 per cent and 0.2 per cent on weekly basis, to close respectively at 1,512 points and 2,546 points.

Egyptian stocks were the main gainer in the Middle East this week due to what analysts described as stronger local and foreign demand.

Egypt's AGX30 index, which measures the performance of the market's 30 most active stocks, climbed 4.8 per cent this week, closing at 6,317 points.