AMMAN, 18 September 2004 — Thanks to rising oil prices and dormant investment opportunities in Iraq, Middle East stocks are still “promising” despite profit taking moves that characterized some bourses in the region this week, financial analysts said yesterday.
“I believe regional markets will continue their promising performance as they benefit from rising oil prices and dormant investment opportunities in Iraq,” Saqr Abdul Fattah, Investment Manager at the Housing Bank for Trade and Finance, told Arab News.
“I think the security situation in Iraq will not persist as it is and eventually we will have to see it brought under control. It is a matter of time,” he said. Abdul Fattah contended that the huge incomes expected to accrue to oil-rich countries in the Gulf “will have offshoots in the form of cash outflows to other markets in the region, including the Amman Stock Exchange (ASE)”.
The ASE general price index edged higher this week, closing on Thursday at 2,980 points, up from 2,979 points last week, according to the market’s weekly report. Out of the 123 companies listed on the bourse, 49 firms advanced, 50 retreated while the prices of 24 companies closed unchanged, the report said.
“The market took a turn during the middle of the week as investors decided to correct their positions, thus driving prices down,” said the Altas Investment Group, the investment arm of the Arab Bank, in its weekly report. A portfolio manager said he expected Jordanian shares “to benefit from a speculation move currently sweeping the market ahead of the publication of third quarter results that are due to come out after Sept. 30”.
The Saudi stock exchange, the region’s largest bourse, also witnessed a series of profit taking corrections this week. The market’s benchmark price gained 0.5 percent in the trading week ending on Thursday, to close at 6,427.82 points, compared to last week’s close at 6,396 points.
However, the index hit a record high of 6,435 points on Wednesday, buoyed by the rising oil prices and the good performance of banks and blue chip firms, dealers said.
Kuwait’s KSE index also gained 0.5 percent this week, closing at 5,974.7 points, according to the market’s weekly report. “We expect the index to crash the psychological barrier of 6,000 points next week, thanks to the encouraging performance of investment, services and industrial sectors,” an Amman-based analyst said.
