Gulf markets rally on gains in oil, global stocks

DUBAI - Gulf Arab markets rebounded on Sunday as gains in global stocks and oil prices at 10-month highs sparked a region-wide rally.

By (Reuters)

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Published: Sun 23 Aug 2009, 8:51 PM

Last updated: Thu 2 Apr 2015, 3:46 AM

Qatar made its biggest gain for four weeks and Dubai added 2.5 percent, clawing back some of last week’s losses, while Kuwait rose for the first session in five. Oman hit a nine-month high and Abu Dhabi and Bahrain also advanced.

Saudi Arabia fell, but the other benchmarks closed within a few points of their intraday highs, indicating further gains are likely on Monday if Asian markets start the week positively.

‘Gulf markets are reacting to gains in oil and global markets over the weekend and the rise on the Saudi index yesterday,’ said Samer Al Jaouni, General Manager of Middle East Financial Brokerage Co in Dubai.

‘There’s not enough news locally to move prices, so global stocks are driving our markets.’

Better-than-expected US housing data has boosted hopes for a swift global economic recovery, pushing oil and world stocks to 10-month highs on Friday.

‘The trend is up, because people believe the worst is behind them — the market has priced in an improvement, but we’ve yet to see the data points to back this up,’ said a Dubai-based analyst who asked not to be named. ‘So investors will take profits whenever news comes out to suggest prices have run ahead of themselves.’

Saudi Arabia’s index fell for the second session in three as volumes sank to a 46-week low, weighed down by muted profit-taking following Saturday’s rise, its largest for four weeks.

The Saudi working week runs from Saturday to Wednesday, while for the rest of the Gulf it is Sunday to Thursday, meaning that the Saudi bourse, the largest in the region, often sets the tone for its neighbours.

Industrial stocks lifted Oman’s index after the sultanate said it would spend $7.8 billion on new water and power projects over the next six years, while rising oil prices also spurred investors’ expectations for continued infrastructure spending.

Raysut Cement surged 5.5 percent to a 46-week high and Oman Cables Industry rose 4.3 percent.

‘Oil rising means government spending will continue and that means the construction sector will do well again this year — most of the big gainers today (were) related directly or indirectly,’ said Sayed Quadry, vice-president of business development at Amwal Investment in Muscat.

Beaten-down property stocks rebounded to helped Dubai’s index recoup some of last week’s 5.7 percent fall, its largest weekly reverse for more than a month. Emaar Properties and Union Properties climbed 4.3 and 4.6 percent respectively.

‘All this could be wiped out in an instant — if disappointing news comes out, people will be prepared to sell very aggressively, as we saw last week,’ said the Dubai analyst.

Aabar Investments was among major gainers on Abu Dhabi’s index, which rose for the third session in four. Aabar added 5 percent, tracking gains in one of its key investments, Daimler AG.

The latter rose 6.8 percent on the final two days of the European trading week and has gained 62.6 percent since Aabar bought a 9.1 percent stake in the German car firm in March.

In Qatar, Barwa Real Estate was the main gainer, climbing 3.2 percent, bouncing back from last week’s double-digit reverse that followed its appointment of a new chief executive.

‘There’s still some uncertainty about Barwa’s operations outside Qatar and its merger with Qatar Real Estate Investments Co (QREC),’ said Jaouni.

In April, Barwa said it expected its merger with QREC to take four to six months.

HIGHLIGHTS OF SUNDAY’S TRADING

DUBAI

· The index rose 2.5 percent to 1,858 points.

QATAR

· The benchmark climbed 2.3 percent to 6,842 points.

ABU DHABI

· The index rose 1 percent to 2,826 points.

OMAN

· The measure climbed 1.7 percent to 6,220 points.

KUWAIT

· The index edged up 0.5 percent to 7,887 points.

EGYPT

· The index rose 3.3 percent to 6,530 points.

BAHRAIN

· The benchmark rose 0.4 percent to 1,514 points.



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