Panic over? Saudi, Dubai stock markets in the lead after tumble

Published October 14th, 2014 - 01:04 GMT
Most major stock markets in the Middle East rebounded on Monday, led by bourses in Saudi Arabia and Dubai, as global equities stabilized and several companies in the region reported strong quarterly earnings.
 
Saudi Arabia’s main index was the region’s best performer on Monday, jumping 2.3 percent to 10,378 points. Heavyweights Al Rajhi Bank and Saudi Basic Industries (SABIC) were the main supports, up 2.4 and 2.2 percent respectively.
 
But so far the stock market has been focusing more on demand than supply factors, analysts said.
 
“On the demand side, which is the most important, the economic growth of China is the most important to the petrochemical companies of Saudi Arabia,” said Turki Fadaak, research and advisory manager at AlBilad Capital in Riyadh. Dubai tumbled as much as 2.7 percent early on Monday, however, it closed 1.9 percent up to 4,709 points on relatively strong volume as most stocks gained.  Abu Dhabi’s index rose 1.0 percent to 4,947 points as blue chip First Gulf Bank added 1.4 percent.
 
Qatar’s benchmark edged up 0.5 percent to 13,478 points. Shares in Qatar Electricity and Water Co rose 1.1 percent after it reported a 8.8 percent increase in third-quarter net profit on Monday, beating analysts’ estimates.
 
Kuwait index slipped 0.2 percent to 7,557 points. Oman index fell 1.6 percent to 7,199 points, and 
Bahrain index slipped 0.1 percent to 1,465 points.
 
Egypt’s bourse remained in a profit-taking mood and fell 0.5 percent. — SG/Reuters
 
Sitting on 34 percent gains year-to-date, the Cairo bourse is the second-best performer in the region after Dubai, which is up 40 percent.
 
Although cheaper oil would generally be a boon for Egypt as an energy importer, some investors may be concerned that a prolonged slump would make the Gulf nations less willing to continue their generous financial support for Cairo.
 
“If oil keeps going down drastically from these levels the question is whether the GCC (Gulf Cooperation Council) will have to cut down their spending,” said a Cairo-based analyst.
 
“And before they cut domestic expenditure, they will probably deal with disposable items and reduce spending abroad.” 

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