Tadawul rebounds after Eid holiday on Astini News
AMMAN: Arab stock markets closed last week mixed as investors continued to harbor concerns over the ability of US and European economies to evade a fresh recession, financial analysts said Friday.
They expected regional bourses to come under fresh pressure next week, particularly after the failure of the Wall Street and other global bourses to respond positively to the package announced Thursday by President Barack Obama to stimulate the US economy.
"I believe Middle East markets, particularly in the Gulf area, will come under further negative impact from Obama's speech due to the close linkage between global economies and the equity markets in the Gulf region," Wajdi Makhamreh, CEO of the Amman-based Noor Investments, said.
"Markets apparently believe that the package unveiled by Obama will be unable to create the wanted improvement in the performance of the world economy, particularly if the major European countries fail to adopt parallel packages," he said.
"A major challenge to Obama's proposal, which seeks to spur growth and create new jobs, could come from the failure of the Republican party to endorse the blueprint," he added.
Makhamreh expected the continued fears over a possible double-dip global recession to put down pressure on oil prices with fresh negative fallout on Gulf stocks.
Saudi shares rebounded last week after a long holiday.
The Tadawul All-Share Index (TASI) gained 2.43 percent on weekly basis, led by the petrochemical and banking sectors, to close at 6,124.40 points.
"The market's weekly closure in this area reflects a state of caution on the part of investors due to the persistent world economy concerns," Saudi analyst Mohammad Anqari said.
"Investors apparently prefer not to part with more liquidity and incur risks at the time being as ambiguity continues to dominate the global economic scene," he added.
Anqari expected the Saudi benchmark to rise toward the 7,000-point level only when investors felt that convincing measures were taken to ease the fears surrounding the US and European economies.
"I believe there are huge funds which will be ready to enter the equity market when such fears disappear," he said.
According to a report by the Kuwait Asset Management Company, the capitalization of Gulf stock exchanges shrank by $83 billion since the beginning of the year due to concerns linked to the Arab uprisings, the downgrade of the US sovereign debt and the euro zone debt crisis.
Kuwait's KSE all-share index also gained 2.96 percent in the first week of September, led by the banking sector, to close at 5,962 points.
The benchmarks of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi shed 0.79 per cent and 0.6 percent on weekly basis, closing respectively at 1,481 points and 2,599 points.
Qatar's index gained 0.18 percent last week, closing at 8,366 points while Bahrain's benchmark closed 1.05 percent in the green at 1,271 points.
The all-share index of the Amman Stock Exchange gained 1.2 percent last week, closing at 2,052 points.
Jordanian shares still suffered from lack of confidence, but Makhamreh said that the ASE stood to gain from negotiations due to start on Sunday in Jeddah for Jordan's admission to the Gulf Cooperation Council (GCC).
Egypt's AGX 30 index, which measures the performance of the market's 30 most active stocks, rose by 2.5 percent on weekly basis, to close at 4,755 points.
The GulfBase GCC Index edged higher by 1.64 percent to 3,719.86 points last week. The value of GCC traded shares surged 30.96 percent to $5.16 billion, while volume increased 152.15 percent to 2.23 billion of shares.
