Arab bourses subdued by Iran nuclear standoff, dividends

Regional bourses reflected mixed performance this week, echoing concerns over the escalating military rhetoric over Iran’s nuclear programme as well as dividend distributions by listed firms, they added.

“I believe Arab stock markets will continue to be affected by political factors, particularly the confrontation between Iran and Western powers over Teheran’s nuclear programme,” Nizar Taher, head of brokerage at the Jordan Ahli Bank, told Deutsche Presse-Agentur dpa.

“I think dividend distribution will also remain a key factor that decides future trends of markets in the region,” he said.

Taher expected last week’s turmoil at international stock markets to have an “indirect impact” on Middle East bourses.

Other analysts discerned a profit taking move which they said had put downward pressure on several markets in the region this week.

The Saudi stock exchange, the Arab world’s largest bourse, retreated this week following continuous gains over the past three weeks.

The Tadawul All Shares Index (TASI) shed 0.8 per cent this week, closing at 8,176.37 points down from 8,245.05 points last week.

TASI is currently 3.1 per cent higher than the year’s start, according to the weekly report of the Riyadh-based Bakheet Financial Advisors (BFA).

“TASI started the week with a rising trend approaching the 8,500- point level on Sunday, but could not cross it and decreased gradually under selling pressure that lasted for the rest of the week,” the report said.

The BFA noticed that small stocks continued to attract investors’ interest in terms of trading volume.

“The market’s 20 smallest companies captured 33 per cent of the turnover this week,” the report said.

“In case these stocks continue their upward trend, they could fuel a harsher correction and negatively affect the market’s future direction due to their negative psychological impact on investors,” it added.

Jordanian shares continued to be steady for the fourth week in a row amid foreign buying which focused on the heavyweight Arab Bank and other blue chip firms.

The all-share price index of the Amman Stock Exchange gained 0.81 per cent this week, closing at 6,439 points compared with 6,387 points last week, according to the ASE weekly report.

“The outlook is positive amid reports of rising liquidity in the market and the arrival of fresh funds from the Gulf region and elsewhere,” Taher said.

The market was also receiving optimistic gestures from ongoing negotiations for the takeover of 10 per cent of the Arab Bank shares by the Emaar real estate conglomerate of Dubai, he added.

Kuwait’s KSE all-share price index rose by 0.3 per cent this week, closing at 9,753 points, compared with last week’s close at 9,726 points.

The United Arab Emirates stock exchanges of Dubai and Abu Dhabi also retreated this week under profit taking moves and regional political pressures.

The decline was led by the heavyweight Emaar share, which lost 1.95 per cent on Thursday alone.

The UAE all-share price index shed 0.4 per cent this week, closing at 4,080 points, down from 4,095 points last week.