Middle East markets on the up

30/01/2010 00:00 AST

Most Middle East markets rose yesterday as improved global sentiment spurred some investors to take advantage of lower prices and open new positions.

Trading was again lacklustre, however, and analysts said volumes would have to increase substantially for regional stocks to escape the broader downtrend.

"We haven't had a lot of participation from foreign or regional institutions, so it's pretty much a retail market and none of these investors want to get caught when bad news comes out, which is why we're seeing such volatility in the market," said Jithesh Gopi, head of research at SICO investment bank.

"Improvement and more visibility on earnings will play a crucial role in setting the direction of the market."

Dubai was the most volatile bourse, rising 2.2 per cent to trim its losses this week to 3.2 per cent.

Dubai Investments Company climbed 3.4 per cent after swinging back into profit, while Abu Dhabi's Sorouh Real Estate rose 3.6 per cent, with investors unmoved by the developer's quarterly earnings missing estimates.

Price movements

"The market has already priced in bad results for most companies, so price movements are not related to fourth quarter results — it's all about sentiment right now," said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments.

"There's a rebound on international markets and we're seeing a rebound here, because sentiment is getting better after [US President] Barack Obama's speech yesterday, which reassured investors that the US economy is stabilising."

On Wednesday, Obama promised Americans that he would revive jobs growth and curb exploding deficits in a speech to Congress that also took a more moderate tone on US banking curbs.

This helped US markets edge higher overnight, spurring early-morning gains in Asia, with Japan's Nikkei ending 1.6 per cent higher.

Agility climbed 5.3 per cent to 600 fils, lifting Kuwait's index to a higher close as speculators bought into the stock following a recent slump. The logistics provider fell 12.3 per cent in a 13-day slide to Wednesday's close.

"Whenever Agility fell below 600 fils, it attracts speculators who then sell when the stock rises back above this level," said Naser Al Nafisi, general manager for Al Joman Centre for Economic Consultancy in Kuwait.

Commercial Bank of Kuwait (CBK) fell 4.1 per cent. On January 21, Fitch Ratings said it may cut its rating for the lender, while earlier this month, CBK's entire board resigned, although the stock has held firm.

Gulfnews