Reuters
Solid corporate earnings and rebounding global equities lifted most stock markets in the Middle East yesterday, while Saudi Arabia led the rally after stabilising oil prices provided additional support to its petrochemical stocks.
European shares, which have largely set the direction for markets in the Middle East since last week, got a major lift yesterday after European Central Bank insiders told Reuters the bank was readying a plan to buy corporate bonds.
That helped Dubai’s index climb out of negative territory and close 1.5% up. There are so far no clear technical signs that the market is starting any extended recovery, however; the index, last at 4,442 points, remains below the 200-day average, at 4,576. Last week it closed below that level for the first time since 2012.
Abu Dhabi’s bourse added to its gains yesterday after Europe rose, and climbed 1.1%. Shares in investment firm Waha Capital rose 1.1% after it secured regulatory approval to buy back up to 10% of its outstanding shares.
The firm has also said the buyback will be carried out within 12 months of approval by the Securities and Commodities Authority.
Saudi Arabia’s benchmark outperformed the region and jumped 2.6% on the back of the heavyweight petrochemical sector, which surged 3.8%.
Brent crude oil held its gains, trading near $86 a barrel yesterday as news of robust Chinese oil demand buoyed the market and, although Saudi petrochemical stocks are only moderately correlated with crude prices, oil tends to affect investor sentiment.
“I think we just saw a continuation of the rebound that began in the previous sessions,” said Amer Khan, senior executive at Dubai’s Shuaa Asset Management. “Perhaps there was a slight overshoot on the decline.”
Saudi Arabia’s index tumbled 10% last week as it caught up with declining global markets after a long break for the Eid al-Adha holiday.
“The key driver for markets going forward is going to be third-quarter earnings,” Khan said.
Shares in Saudi Kayan Petrochemical Co surged 6.6% after it corrected its earnings statement, saying it had incorrectly overstated the nine-month net loss by 9mn Saudi riyals ($2.4mn).
Egypt’s bourse rose 1.2% after stabilising in the previous session when Moody’s changed its outlook on the country’s sovereign debt rating to stable from negative, citing a more stable political and security situation and signs of economic recovery.
All but a handful of stocks in Cairo were up and Commercial International Bank, up 1.3%, was the main support after Moody’s upgraded its outlook to stable, along with several other lenders.
Elsewhere in the Gulf, the Kuwait index slipped 0.4% to 7,354 points, the Oman index edged up 0.2% to 6,913 points and the Bahrain index edged down 0.1% to 1,444 points.
