Arab stocks bullish on high oil prices, global recovery hopes

Feb 24, 2012, 13:27 GMT

Amman - Arab stock markets rallied across the board this week, buoyed by surging oil prices and solid performance data on the US and German economies, financial analysts said Friday.

They expected the Greek parliament's approval of the second bailout deal to have a positive impact on Middle Eastern markets in the coming weeks.

'I believe rising oil prices and the latest signs of sustainable world recovery are the main factors behind this week's substantial gains by Arab bourses,' Wajdi Makhamreh, chief executive of Amman-based Noor Investments, told dpa.

'I think the austerity measures adopted by the Greek government under the new bailout plan have also helped to restore confidence in regional markets, particularly in the Gulf area,' he said.

Saudi stocks extended gains this week, propelled mainly by the petrochemical and banking sectors, particularly the Saudi Basic Industries Corp (SABIC).

The Tadawul All Share Index (TASI) of the Saudi market climbed 3.2 per cent on a weekly basis, crashing the psychological barrier of 7,000 points and closing the week at 7,031.26 points, its highest level since August 2008.

Analyst Saud al-Mutair expected blue chips to lead the market well above the 7,000-point level in the coming weeks.

'Undoubtedly, local and global factors are contributing to the rally at the Saudi markets,' said al-Mutair, professor of economics at Mohammad Bin Saud Islamic University in Riyadh.

'The sustainable low figures of jobless claims in the United States and China's expansionist monetary policy will push up crude prices and enhance demand for petrochemical products,' he added.

Kuwaiti shares extended gains this week, led by the investment and services sectors, analysts said.

Kuwait's KSE all-share index gained 1.84 per cent on a weekly basis, closing at 6,092 points.

The benchmarks of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi climbed 7.65 per cent and 2.6 per cent on a weekly basis, closing respectively at 1,632 points and 2,539 points.

Qatar's index rose 2.2 per cent, closing the week at 8,733 points, while Bahrain's benchmark gained 0.9 per cent, closing at 1,154 points.

Jordanian stocks were volatile this week due to sagging confidence and a liquidity crunch, Makhamreh said.

The all-share index of the Amman Stock Exchange (ASE) inched lower, closing the week at 1,954 points, compared with last week's close at 1,957 points.

Egyptian stocks kept up their vigorous performance this week, encouraged by the relative political stability and easing violence, analysts said.

Egypt's AGX30 index, which measures the performance of the market's 30 most active stocks, climbed 3.5 per cent on a weekly basis, closing at 5,142 points.

The Egyptian bourse was led over the past few days by the housing and real estate sectors, following reports that Qatar's Barwah group was mulling the implementation of a large land development project in Egypt.