Arab stocks steady as impact of eurozone crisis retreats

Dec 9, 2011, 13:17 GMT

Amman - Arab stocks rallied this week as investor fears of a fallout from the eurozone debt crisis eased, financial analysts said Friday.

'I believe the impact of the eurozone ordeal is starting to shift to the back seat, as investors start to focus attention on the annual profits of listed firms,' Nizar Taher, chief of brokerage at the Jordan Ahli Bank, told dpa.

'The decision by the European summit to adopt stricter budget rules could have a positive impact on global markets, including Arab bourses, but ambiguity will continue to prevail as investors want to see the response on the ground,' he added.

Taher thought that regional politics, including the Arab Spring uprisings and the standoff over the Iranian nuclear programme, would continue to reflect negatively on regional markets, particularly foreign investors.

Saudi stocks extended gains, buoyed by the petrochemical and banking sectors. The Tadawul All Share Index (TASI) of the Arab world's largest stock exchange climbed 2.4 per cent on a weekly basis.

Saudi analysts expected the stock market to score further gains towards the end of the year as investors await the 2012 budget, which usually includes lavish spending.

'The Saudi budget is a key supporter of the stock exchange,' said Zayed Hossan of King Saud University.

Kuwaiti stocks scored fresh gains this week as investors appeared upbeat over the latest political developments in the country, including the formation of a new government and the ruler's dissolution of the parliament.

Kuwait's KSE all-share index gained 0.5 per cent on weekly basis, closing at 5,867 points, led by the banking sector.

The benchmark of the United Arab Emirates stock exchange of Dubai gained 0.4 per cent this week, while the Abu Dhabi index inched lower, closing at 2,442 points compared with last week's close at 2,445 points.

Qatar's index rose 1.7 per cent, closing week at 8,808 points, while Bahrain's benchmark closed unchanged at 1,158 points.

Jordanian stocks scored modest gains, as investors continued to fear that unrest in Syria would negatively impact the Jordanian economy, Taher said.

The all-share index of the Amman Stock Exchange (ASE), ended the week at 1,981 points, marginally up from last week's close at 1978 points.

Egypt's AGX 30 index, which measures the performance of the market's 30 most active stocks, plunged 2.6 per cent on weekly basis, to close at 3,983 points.

Analysts attributed the decline mainly to a sell-off by Arab and foreign investors who were concerned over gains by Islamic parties in the first stage of parliamentary elections.