ME stocks seen extending losses

04/07/2010 00:00 AST

Middle East markets were seen extending losses on Sunday as disappointing US employment figures added weight to fears of a global double dip recession.

Saudi Arabia's index fell one per cent on Saturday, retreating for a fifth straight trading day to track Friday declines in oil and US benchmarks, with the Dow dropping 0.5 per cent to 9,686 points on Friday, its lowest close since October 5.

"I think we should continue to see declines, although the drops in the likes of the UAE are at a slower pace, so it looks like we're starting to build some resilience and we never went up that much in the first place," said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments.

"That being said, we should see further downside pressure and our markets should continue to trickle down on very low volumes, probably until the end of the summer," he noted.

Regional second-quarter earnings are imminent, but analysts seem unsure if they can provide much of a lift.

"The Q2 might carry a short-lived catalyst, if at all - we are clearly still correlated with what's happening globally and it looks like the formation of a bear market - the Dow has dropped below 10,000 and should continue to go down and that will weigh on other markets across the globe," Arabi added.

There are few company-specific catalysts to trade on, although Saudi Arabian Fertilizers Company (Safco) said it will pay a 6 riyals for H1, helping the firm's shares rise 4.3 per cent on Saturday.

In Dubai, Du will gain access to the network of rival and market leader Etisalat, creating a new wave of competition in the country, a local newspaper reported on Friday.

Reuters