Stocks to falter as holidays set in

09/07/2011 00:00 AST

Gulf and other Arab markets are expected to waver during summer holidays and the advent of the Muslim fasting month of Ramadan, tentatively set to start on Aug. 1.

The regional markets scored modest gains this week as investors appeared upbeat over second quarter earnings and surging oil prices, financial analysts said Friday.

"I think Arab stocks, particularly in the Gulf region, derived momentum this week from semi-annual results and rising crude prices," Wajdi Makhamreh, CEO of the Amman-based Noor Investments brokerage, said.

"Regional bourses are also expected to come under further negative impact from Arab uprisings, the eurozone debt crisis and the summer vacations," he said.

Saudi stocks were volatile this week as investors awaited the release of the second quarter earnings, particularly those of the petrochemical and banking sectors, analysts said.

Tadawul All Share Index gained 0.55 percent on weekly basis, closing at 6,612.46 points. Saudi analysts expected prices to plateau in the coming couple of weeks, as liquidity usually tapers off during the summer season and during the fasting month.

However, the Saudi market stands to gain in the medium and long terms from the surging oil prices and the government’s huge spending, Riyadh-based analyst Mohammad Anqari said.

The worst scenarios of the fallout of Arab revolts on regional markets is finding expression in the reported flight of foreign capital from the Arab region to seek more save havens in the world’s emerging markets, Makhamreh further said.

"Even Arab governments with surpluses are now reportedly seeking to invest their money outside the Arab region," he added without further elaboration.

Kuwait’s KSE All-Share Index edged higher closing week at 6,213 points compared with last week’s close at 6,212 points.

Stock benchmarks of Dubai and Abu Dhabi stock exchanges gained 2.7 percent and 0.39 percent, to close respectively at 1,558 points and 2,715 points. Qatar’s index gained 1.69 percent on weekly basis, closing at 8,502 points.

Saudi Gazette