Arab stocks steady as investors eye annual earnings, oil prices

Dec 17, 2010, 13:44 GMT

Amman - Arab stock markets steadied this week, drawing momentum from surging oil prices and the nearing release of 2010 annual results, financial analysts said Friday.

However, they warned that regional bourses, particularly in the Gulf area, would retain their 'psychological linkage' with global markets in the new year, given the close affiliation existing between stock exchanges in the oil-rich Arab states and the world's leading economies.

'I believe regional investors will keep a close eye in the coming couple of weeks on the annual earnings of listed firms,' Wajdi Makhamreh, CEO of the Amman-based Noor Investments brokerage, told German Press Agency dpa.

'Besides, Middle East stock markets have to reckon with any major developments on global markets in response to the euro sovereign debt crisis, particularly the rating of banks in Spain, Portugal, Ireland and other European countries,' he said.

Makhamreh said that oil prices would remain a key factor determining the direction of Gulf and other Arab stocks in 2011.

'I think crude prices, which are expected to surge to 120 dollars per barrel in 2011, will act as the major lift for Arab stocks in the new year,' Makhamreh said.

'Higher oil prices will mean larger Arab surplus petrodollars that seek investment outlets, including regional stock markets,' he added. Saudi stocks extended gains this week, receiving support from the construction, banking and transport sectors, analysts said.

The Tadawul All Share Index (TASI) of the Arab world's largest stock exchange gained 0.65 per cent on weekly basis, to close at 6,499 points.

Jordanian stocks were volatile this week, as investors monitored any change in the country's monetary policy due to be decided by the new governor of the Central Bank of Jordan (CBJ), Fares Sharaf.

'I believe any easing of the monetary policy will reflect positively on the Amman Stock Exchange (ASE),' Makhamreh said.

The ASE all-share index gained 0.14 per cent this week, closing at 2,363 points, according to the market's weekly report.

Kuwaiti stocks also scored gains this week amid reports of an imminent signing of a multi-billion-dollar deal under which Kuwait's mobile group Zain will sell a 40 per cent stake to the United Arab Emirates telecommunication firm, Etisalat.

Kuwait's KSE all-share index went up by 0.47 per cent this week, closing at 6,853 points.

Meanwhile, the Kuwaiti stock exchange planned to adopt a new index in 2011 which will be based on the performance of 15 stocks, according to the bourse's chief Hamed al-Saif.

He said that the new benchmark will be launched in cooperation with the Nasdaq OMX group.

UAE shares were the main losers among Arab stock markets this week due to selling pressures by foreign investors, analysts said.

The benchmark of the Dubai stock exchange shed 3.18 per cent, closing at 1,639 points.

The decline was led by the sectors of public utilities, real estate and communications, analysts said.

The Abu Dhabi all-share index also lost 1.7 per cent, to close the week at 2,716 points.

Egypt's AGX 30 index, measuring the performance of the market's 30 most active stocks, gained 0.45 per cent on a weekly basis, closing at 6,904 points.

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