AMMAN, 28 August 2004 — Middle East stock markets are expected to keep up their bullish outlook for the coming weeks, deriving support from soaring oil prices, good results of listed firms and a reported breakthrough at Iraq’s embattled sacred area of Najaf, financial analysts said yesterday.

However, they noticed that shares could take “sideways” until Sept. 15, when activity is expected to pick up again after the return of a large number of investors and dealers from summer vacations.

“I believe the outlook remains bullish in general, but most investors will take a wait-and-see approach in the coming weeks pending the release of third quarter results,” Wajdi Makhamreh, head of trading at the Atlas Investment Group, told Arab News.

“Traders are currently focusing on shares of firms with good half-year results, but new factors such as an improvement in the security situation in Iraq will reflect positively on markets,” he said.

The all-share price index of the Amman Stock Exchange climbed 1.74 percent in the trading week ending Thursday, to close at 2,873 points, compared with last week’s close at 2,824 points, according to the ASE weekly report. The trading activity was dominated by the banking sector, which gained 2.33 percent, the report said.

Another portfolio manager expected regional markets to “take sideways in the coming three weeks as investors await fresh moving factors, including the situation in Iraq, where a solution appeared in the offing”. “I believe any improvement in the security situation in Iraq will have a positive impact on neighboring stock markets, where listed firms aspire to clinch Iraqi reconstruction contracts,” he said.

“However, rising oil prices and strong performance of firms will render backing to Gulf shares, particularly in Saudi Arabia and Kuwait,” he added, asking anonymity.

The Saudi stock exchange’s price index gained 1.1 percent and Kuwait’s KSE index gained 0.9 percent this week.

Egypt’s Hermes index climbed 3.8 percent, closing at 16,862 points, compared with last week’s close at 16,250 points.