Oman’s blue chip stocks surge

26/08/2011 00:00 AST

Oman’s blue chip stocks surged on Thursday as volumes peaked and funds returned to the battered market, while most Gulf markets closed higher with investors optimistic that US Federal Reserve Chairman will announce new measures on Friday to help the US economy.

Oil services firm Renaissance Services surged 5.3 percent, accounting for the highest trading volumes in Oman. The stock plummeted to a 2009-low last week after it discovered financial fraud at unit Topaz and reported a 77-percent drop in first-half net profit.

Investors shifted focus to company fundamentals and bought battered stocks on cheap valuations. The benchmark index slumped to its lowest level in two-years on Aug. 11 amid a regional downtrend on fears the global economy is retreating into a recession.

“There is a strong come-back from local pension funds and also foreigners,” said Adel Nasr, United Securities brokerage manager.

“Lots of asset managers are accumulating (stocks) after the drop we had last week. The upward trend was accelerated by global markets’ sentiment.

“If you rule out Renaissance, Q2 was all good results — now we are seeing this reflected in the market.”

Heavyweight Bank Muscat gained 0.6 percent and telecoms operator Nawras rose 0.5 percent. Small-cap stocks also strong gains.

Muscat’s benchmark rose 1.2 percent, up for a second day, with trading volumes the highest since April 14. The market took support from gains in global markets.

World stocks, measured by the MSCI world equity index rose 0.3 percent. Investors are waiting to see if Bernanke will indicate the Fed is ready to offer more stimulus to the world’s largest economy when he addresses central bankers at an annual symposium in Jackson Hole, Wyoming, on Friday.

“There is a positive sentiment prevailing in global markets prior to meeting- with high expectation of some drastic measures,” said UAE-based Rami Sidani, Schroders Middle East head of investment.

“We’re seeing a rally in global financial markets over the past four days. This is being reflected in our markets so there’s some positive sentiment as a spillover.”

Dubai’s retail-driven stocks rose, with Emaar Properties advancing 0.7 percent, Dubai Financial Market gaining 2.7 percent and Arabtec up 1.5 percent.

The benchmark index closed 0.5 percent higher, cutting short two-days of losses.

DP World gave back early-session gains spurred by upbeat first-half results and ended 1.9 percent lower. It’s profit increased by four-fold to $705 million compared with $177 million in the same period in 2010.

Abu Dhabi banks helped lift the index to its fourth-straight gain. It ended 0.3 percent higher.

For more on this Click Here

Reuters