Gulf stock indexes rise near technical barriers

24/02/2016 04:26 AST

Major Middle Eastern stock markets rose on Tuesday, nearing important technical barriers as investors were encouraged by strength in oil and global equities prices. Rises in Brent crude and emerging market stocks over the past several days have helped to create a feeling that after a disastrous start to the year, the worst may be over for Gulf bourses; this sentiment has been seen in rising trading volumes.

The Saudi stock index rose 0.8 percent to 6,023 points in active trade on Tuesday. It faces resistance at the February and January peaks of 6,056-6,098 points.

Petrochemical blue chip Saudi Basic Industries edged down 0.3 percent as buying focused on second-tier stocks favored by local retail investors trading for the short term. Tihama Advertising jumped its 10 percent daily limit.

Saudi Printing & Packaging also surged 10 percent despite reporting a 52 percent drop in 2015 net profit. It cited fires at two subsidiaries in late 2014 and early 2015 as well as a drop of selling prices.

Elsewhere, Dubai’s stock index rose 0.7 percent to 3,192 points, testing resistance on its late December peak of 3,189 points. A clean break would trigger a reverse head & shoulders pattern formed by the highs and lows since December, and pointing sharply higher.

Beaten-down construction stock Drake & Scull, which hit record lows in January as low oil prices prompted governments in the region to slow project spending, added 7.2 percent in its heaviest trade since last July. District cooling firm Tabreed rose 2.7 percent as CI Capital upgraded the stock to “overweight” from “neutral”.

Abu Dhabi’s index rose 0.4 percent as Abu Dhabi Commercial Bank surged 2.5 percent to 6.95 dirhams, after Goldman Sachs raised its price target for the stock to 8.1 dirhams with a “buy” rating.

In Qatar the index climbed 0.9 percent. Drilling rig provider Gulf International Services, the most active stock, fell 1.4 percent but industrial blue chip Industries Qatar surged 2.3 percent and Barwa Real Estate rose 3.6 percent, recovering from Monday’s loss in response to disappointing fourth-quarter earnings.

Egypt’s index added 0.3 percent. Beltone Financial, which has soared nearly 150 percent in the past 10 trading days on hopes that its new owners will make the company a financial powerhouse, jumped its 10 percent daily limit once again. But most stocks among the 10 most heavily traded barely moved.

Meanwhile, world oil prices nudged higher Tuesday as OPEC producers met to discuss a possible freeze to crude output levels in a bid to tackle a supply glut.

Around 1300 GMT, US benchmark West Texas Intermediate for delivery in April was up one cent at $33.40 a barrel. Brent North Sea crude for April rose 18 cents to $34.87 compared with Monday’s close.

US crude had rebounded above $30 a barrel and European benchmark Brent climbed well over $34 Monday on hopes that discussions among key producers would lead to concrete action to stabilize the battered market.

“Yesterday’s increase could have come mainly from OPEC trying to rally the market into thinking that there will be action to come between OPEC and non-OPEC producers” over production, Phillip Futures analyst Daniel Ang told AFP.

Saudi Gazette