AMMAN, 24 July 2004 — The strong performance of Middle East bourses is expected to persist over the next couple of weeks, buoyed by half-year profits and predictions of improving security in Iraq as a result of Iraqi Prime Minister Iyad Allawi’s current regional tour, financial analysts said. The stock markets of Jordan, Saudi Arabia and Kuwait hit record levels in the trading week closing Thursday.
“The primary driving force behind the strong performance of the markets is the good semi-annual results of listed firms, which so far indicated markets will remain bullish until Aug. 15, when results of most listed firms will be out,” Amer Muasher, deputy manager of the Ahlia Brokerage Co., said.
“Businesses in Jordan and other countries neighboring Iraq also stand to gain from any improvement in security there that could result from Allawi’s current trip,” he added.
During Allawi’s visit to Jordan earlier this week, the two countries agreed to set up a higher joint committee for overseeing cooperation in all spheres.
The Iraqi prime minister is urging Arab countries to assume firmer control on their borders with Iraq to prevent infiltration of armed men.
The all-share price index of the Amman Stock Exchange (ASE) gained 1.35 percent this week, to close at a record high of 2,918 points, compared with 2,879 points last week, according to the ASE weekly report.
However, the weekly turnover retreated by 13 percent, to 66.4 million dinars ($94 million), down from 76.7 million dinars ($108 million) last week, the report said.
“We believe Jordanian shares will score fresh gains next week, with expectations the benchmark price could crash the 3,000-point barrier,” Muasher said. “By law, all Jordanian firms are obliged to publish their half-year results by July 31,” he added.
The Saudi bourse’s price index gained for the fifth week in a row, rising 1.4 percent, propelled by strong half-year results of blue-chip Saudi Basic Industries Corp.(SABIC).
The benchmark price closed at 6,041.70 points, up from last week’s close at 5,958.74 points.
“We believe Saudi shares will score fresh gains in the coming weeks, drawing impetus from good first-half results and strong oil revenues,” an Amman-based portfolio manager said.
In Kuwait, the KSE index climbed 1.3 percent this week to stay slightly above the 5,600-point psychological barrier.
Further gains are expected in the coming few weeks, with news leaking about plans on the part of the Kuwaiti bourse administration to introduce fresh regulations, including the promotion of institutional trading, an analyst said.
Egyptian stocks also kept up the upward trend, spearheaded by the banking sector that drew benefit from remarks by the new Prime Minister Ahmed Nazif about plans to introduce reforms into the country’s banking system.
The Hermes price index gained 1.15 percent, closing at 15,642 points, up from 15,463 points last week.
