Arab stocks rally after Ramadan, buoyed by easing recovery woes

Sep 17, 2010, 13:20 GMT

Amman - Arab stock markets closed the week higher as positive sentiment prevailed throughout the region due to easing world recovery concerns, financial analysts said Friday.

They also attributed the regional rally to a plan by Dubai world to reschedule a major part of its debt, the end of the Muslim fasting month of Ramadan and the improving performance of banks in leading Gulf countries.

'I believe a positive sentiment has come to dominate Arab markets due to a number of factors, including the release of reports indicating the US economy could be heading to recovery,' Wajdi Makhamreh, CEO of the Amman-based Noor Investments brokerage, told the German Press Agency dpa.

He also attributed the regional upbeat atmosphere to an agreement reached by the Dubai World conglomerate with creditors to reschedule about 25 billion dollars of its debt and the improving performance of banks in Saudi Arabia and Kuwait.

Steps taken by Arab governments to spur their respective stock exchanges and the start of the direct talks between the Palestinians and Israel were also cited by Makhamreh as helping factors.

He said that oil prices would continue to represent a major factor that helps to decide the direction of regional markets.

'The fluctuation of oil prices may affect Arab markets particularly in the oil-rich Gulf region, but crude prices around 75 dollars per barrel apparently satisfy Gulf states which aspire to achieve surpluses that usually seek investments in stocks,' he added.

However, Makhamreh warned against early profit taking moves in Arab markets that could thwart the upward trend.

Saudi shares extended gains this week, led by the petrochemical and banking sectors.

The Tadawul All Share Index (TASI) of the Arab world's largest stock exchange gained 0.76 per cent in two days of trading after the Eid al-Fitr holiday, closing at 6,354.18 points.

Jordanian shares rallied this week receiving support from gains scored by other Arab stock markets.

The all-share index of the Amman Stock Exchange gained 1.29 per cent this week, closing at 2,324 points, according to the ASE weekly report.

The Jordanian stock exchange continued to suffer from a liquidity crunch, but a move by the government to study reasons behind the stock exchange's slip could have been behind this week's gains, Makhamreh said.

Kuwait's KSE all-share index went up 1.2 per cent on weekly basis, closing at 6,839 points, led by the banking, investment and industrial sectors, analysts said.

The United Arab Emirates shares were the main gainers this week, basically due to the Dubai World's debt rescheduling declaration.

The benchmark of the Dubai exchange climbed 3.44 per cent, closing week at 1,647 points, with support coming from the telecom, banking and investment sectors.

The Abu Dhabi all-share index gained 2.96 per cent this week, to close at 2,606 points.

Egypt's AGX30 index, which measures the performance of the market's 30 most active shares, went up 0.47 per cent on weekly basis, to close at 6,530 points.