Arab markets move sideways

AMMAN — Arab stock markets moved within a narrow trading range this week, but financial analysts predicted yesterday that the downward trend could remain dominant in the coming few weeks mainly due to factors pertaining to the performance of listed firms.

By (DPA)

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Published: Sat 29 Jul 2006, 11:53 AM

Last updated: Sat 4 Apr 2015, 1:11 PM

They told Deutsche Presse-Agentur, dpa, that they were inclined to believe that the plunges recorded over the past couple of weeks were mainly due to factors other than the war in Lebanon.

“We so far don’t see the hostilities having a dramatic impact on markets,” said Nabil Daaboub, head of brokerage at the Atlas Investment Group, the investment arm of the Arab Bank.

“I believe the declines recorded in most regional markets have something to do with the half-year results of businesses and other economic fundamentals,” he added.

Daaboub did not rule out a “dramatic effect” on markets of countries adjacent to Iran like the United Arab Emirates and Kuwait if the war expands to involve Teheran.

Other analysts said they expected regional shares to remain volatile in the coming weeks, mainly due to the “nervous mood” that characterises trading decisions of investors and the travel of a large number of traders for summer vacations.

The Tadawul all Shares Index (TASI) of the Saudi Exchange shed 0.9 per cent this week after plunging more than 20 per cent over the past two weeks.

TASI, which closed week at 10,393.28 points, is currently 37.8 per cent lower than the year’s start, according to the weekly report of the Riyadh-based Bakheet Financial Advisors (BFA).

“We expect market volatility to decrease, especially after all listed companies have announced their second quarter results,” the BFA said.

The BFA report said that the “investment-grade companies reported healthy profits although profit growth rates in the first half of this year were lower than in previous years”.

“On the other hand, weak performance by speculative companies was evident as they rely mainly on non-operation profits resulting from investment in the Saudi stock market,” it added.

Jordanian shares remained steady this week and portfolio managers said that the Amman Stock Exchange stood to gain from the shift of Arab tourism from Lebanon to Jordan.

The ASE all-share price index wobbled around the 5,900 points throughout the week, to close on Thursday at 5,865 points, which represents a 1.31 per cent over last week’s close.

The UAE stock exchanges of Dubai and Abu Dhabi were the key losers in the region this week, with their all-share indices declining by 4.6 per cent and 2.9 per cent and closing respectively at 400.1 points and 3,391 points.

Kuwait’s KSE all-share index fell 1.8 per cent this week, closing at 9,494 points down from 9,666 last week.

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