31/08/2015 07:38 AST
Oman stock market, along with other Gulf bourses, staged a smart rally after crude oil prices had the biggest weekly jump in more than six years. The Muscat Securities Market recovered 1.51 per cent or 88 points to close at 5,904.44 points on buying support at lower levels.
Brent crude closed 10 per cent higher last week, trading above $50 per barrel after data showed second-quarter growth in the United States exceeded economist forecasts, spurring renewed investor optimism over the global economic outlook. The Sultanate’s government generates 79 per cent of revenue from hydrocarbon resources.
The market volume was on the higher side with turnover touching OMR4.28 million on 21.85 million shares changing hands. Major gainers on the bourse on Sunday included Oman Textiles Holding, Al Anwar Holding, National Aluminium Products, Al Madina Investment, Oman Investment and Finance and Gulf Investment Services.
Saudi Arabia leads rally
Saudi Arabian stocks led a rally in most equity markets across the Middle East after oil prices had the biggest-weekly jump in more than six years.
The Tadawul All Share Index gained 1.98 per cent to 7,754.69 in Riyadh, headed for the largest two-day increase since December. Saudi Basic Industries Corporation, one of the world’s biggest petrochemicals manufacturers, added 5.8 per cent to lead the advance. Dubai’s DFM General Index climbed 1.13 per cent to the highest in more than a week.
“It’s an unbelievable rally considering the battering oil took in the past few weeks,” said Wadah Al Taha, the Dubai-based chief investment officer of Al Zarooni Group, who favours investing selectively in regional markets over the short term. “The positive close in international markets, especially with China rallying again and US equities ending the week on a positive note, is also helping sentiment.”
More clarity
The Standard & Poor’s 500 Index gained 0.9 per cent last week, masking a volatile period in which the US benchmark plunged the most since 2011 to enter a correction, only to rally more than 6 per cent over two days. The gauge is down 5.5 per cent for the month, the most since May 2012.
Saudi Arabia’s benchmark equity index entered a bear market last week, and the DFM General Index recorded daily losses of as much as 7 per cent and gains of as much as 4.6 per cent in the same period. Brent crude closed below $45 per barrel for the first time in six years on August 24.
“There’s no doubt that the main reason for the Saudi market rally is the significant increase in oil prices on Friday,” said Riyadh-based Mohammed Al Suwayed, the head of capital and money markets at Adeem Capital. “I am waiting for the August close on Monday to make sure that there is no retracement in prices, but I’m cautiously optimistic for the rest of the week.”
Abu Dhabi’s ADX General Index fell 0.17 per cent, while Qatar’s QE Index rose 0.87 per cent. Kuwait’s SE Price Index added 0.47 per cent and Bahrain’s BB All Share Index slipped 0.09 per cent. Today’s move “doesn’t mean that we are in an uptrend,” Al Taha said. “We need more clarity in terms of global economic numbers and stability in oil prices to be able to determine that.”
Egypt’s EGX 30 Index added 0.3 per cent. Emaar Misr for Development, which in June held the country’s biggest initial public offering since 2011, climbed 9.5 per cent. That pares the stock’s loss since its trading debut to 33 per cent.
Next month, Saudi Arabia will provide Egypt $2.9 billion of aid in the form of petroleum products and grants for economic development, ‘Al Mal’ newspaper reported on Sunday.
Times of Oman
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