Arab stocks to remain under pressure from uprisings, Iran showdown

By Abdul Jalil Mustafa Jan 13, 2012, 14:15 GMT

Amman - Arab stock markets are to remain under pressure in the coming months, financial analysts said Friday, because of the political turmoil following the Arab Spring uprisings and the standoff between Iran and Western powers over Tehran's nuclear programme.

'I believe Middle East bourses will continue to suffer in the new year from the fallout of Arab uprisings and the political turmoil resulting from Western threats to Iran,' Nizar Taher, the chief of brokerage at Jordan Ahli Bank, told dpa.

Arab stock markets closed the week mixed as investors awaited the release of annual corporate results, particularly of blue chips, analysts said.

Taher said that pressure on the regional markets from the eurozone debt crisis was 'easing as investors feel assured that European policymakers were serious in finding sustainable solutions.'

Taher expected oil prices at about 100 dollars a barrel would provide a catalyst to Arab stock markets in 2012 and beyond.

'Part of the huge surplus petrodollars accumulated by Arab oil exporters usually finds its way to regional stock markets as fresh investments,' he said.

In a report released this week, the Kuwait Financial Centre (Markaz) expected the earnings of firms listed on the bourses of the six member states of the oil-rich Gulf Cooperation Council (GCC) to grow by 19 per cent in 2012, topping 64 billion dollars.

'This will bring the GCC corporate sector back to the levels reached in 2007 prior to the onset of the global crisis,' the report said.

Saudi shares rebounded this week, driven by annual profit expectations of blue chips, particularly in the petrochemical and banking sectors, analysts said.

The Tadawul All Share Index of the Arab world's largest stock exchange gained 1.23 per cent on weekly basis, closing at 6,486.41 points.

Saudi analyst Walid Abdul-Hadi expected the market's benchmark to push higher in the coming weeks as investors monitor the yearly earnings of leading firms, foremost the Saudi Basic Industries Corp.

Kuwait's KSE all-share index gained 0.35 per cent this week, to close at 5,747 points.

The benchmarks of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi fell by 1.6 per cent, to close at 1,328 points and 2,361 points respectively.

Qatar's index plunged by 2.1 per cent this week, closing at 8,699 points; while Bahrain's benchmark closed week 0.4 per cent in the red at 1,133 points.

Jordanian shares lost fresh ground because of shrinking liquidity and the effects on the economy of the Syrian uprising, Taher said.

The all-share index of the Amman Stock Exchange shed 1.1 per cent this week, closing at 1,955 points.

However, Taher expected the government's appointment of Mohammad Tash as the new chief of the Jordan Securities Commission to spur the market in the coming weeks.

Egyptian shares were the main regional gainers this week, largely because of promises by the United States and the International Monetary Fund to boost the faltering economy, analysts said.

The successful conclusion of general elections also prompted foreign and Arab buying of Egyptian shares this week, they added.

Egypt's AGX 30 index, which measures the performance of the market's 30 most active stocks, climbed 3.5 per cent, closing at 3,778 points.