Arab stocks rally on annual results, global recovery prospects

By Abdul Jalil Mustafa Feb 3, 2012, 14:18 GMT

Amman - Arab stocks scored gains this week as investors appeared upbeat over annual earnings and the improving prospects of a global economic recovery, financial analysts said on Friday.

However, they warned that regional equity shares were still under pressure from Arab Spring turmoil and tension between Iran and western powers.

'I believe stocks, particularly in Gulf markets, are benefiting from dividend distributions, sustainable oil prices and the strong macroeconomic indicators,' Wajdi Makhamreh, CEO of the Amman-based Noor Investments, told dpa.

'However, scoring further gains in the coming weeks will depend on the developments of the conflict between Iran and western powers over threats to close the strategic Strait of Hormuz,' he said.

Makhamreh pointed out that regional stock markets were buoyed by the European Union's efforts to resolve the euro zone debt crisis.

Saudi stocks rallied this week, propelled by the banking, petrochemical and telecom sectors.

The Tadawul All Share Index (TASI) of the Arab world's largest stock exchange jumped 2.9 per cent on a weekly basis, closing at 6,663.48 points, the highest in six months.

'I believe the Saudi benchmark is benefiting from a wave of optimism that has come to dominate the market over the past month,' said Abdullah Baeshen, CEO of the TeamOne consulting firm.

He attributed the upbeat sentiments in the Saudi market to a number of factors, foremost 'the annual results and the recovering global economy'.

Baeshen also cited the strong Saudi economy and increased public spending, which generated liquidity.

Kuwaiti stocks extended gains this week ahead of Thursday's election in which the Islamic-led opposition made significant gains.

Kuwait's KSE all-share index rose 0.7 per cent this week, to close at 5,856 points.

Analysts expected Kuwaiti investors to take a wait-and-see approach next week to know how the market would respond to the outcome of the poll.

United Arab Emirates shares were bullish for a second week, buoyed by the performance of the banking sector and generous dividend distributions, analysts said.

The benchmarks of the Dubai and Abu Dhabi stock exchanges climbed 2.1 per cent and 3.6 per cent on weekly basis, closing respectively at 1,436 points and 2,477 points.

Qatar's all-share index gained 2.3 per cent, closing at 8,636 points, while Bahrain's benchmark closed almost unchanged at 1,137 points.

The all-share index of the Amman Stock Exchange gained 0.4 cent this week, closing at 1,945 points.

Egypt's AGX30 index, which measures the performance of the market's 30 most active stocks, gained 3.42 per cent on weekly basis led by blue chips.

The benchmark closed at 4,584 points after losing 215 points on Thursday due to a sell-off by panicking dealers, analysts said.