AMMAN, 12 February 2005 — Arab stock markets are expected to gather momentum in the coming few weeks prior to a new surge in prices in March ahead of the publication of the first quarter results, despite this week’s “limited” corrections, financial analysts said yesterday.
“I believe markets will retain their upward trend in the coming few weeks despite the limited downward corrections that we saw recently and could see thereafter,” said Amer Muasher, director of brokerage at the National Bank of Jordan.
“I think stocks remain attractive and bourses are set to witness a fresh upward thrust in March ahead of the Q1 results as investors modify their positions in accordance with the 2004 results of listed firms,” he added.
The price index of the Amman Stock Exchange shed 2.56 percent this week, to close at 4,720 points down from 4,844 points last week, according to the ASE weekly report.
The index slid deeper during the week, dragged down by the heavyweight Arab Bank following a decision by its board of directors to shut down the bank’s New York branch.
The Arab Bank share rebounded in the last two days of the week after its management belittled the financial importance of the step, saying the assets of the NY branch represented less than 2 percent of the bank’s total assets.
Saudi shares advanced this week, with the Tadawul All Shares Index gaining 2.1 percent and closing at an all-time high of 8,402.82 points.
Saudi stocks were driven by a 10.3 percent surge of the Saudi Basic Industries Corporation (SABIC), the strong 2004 results of which continued to draw positive reaction from investors, the Bakheet Financial Advisors (BFA) said in their weekly report.
“After the announcement of the financial results of all Saudi blue chips that showed a very strong growth in 2004 profits, we expect investors now to keep their eye on the first quarter results of 2005, particularly petrochemical companies,” the BFA said.
In Kuwait, the KSE all-shares index lost 1.4 percent this week, and closed at 6,388.1 points down from 6,480.8 points last week.
A deep downward correction was also reported at the Egyptian bourse, where the Hermes all-price index shed 3.7 percent, to close week at 30,752 points from 31,936 points in the previous week.
“The sell-off was prompted by reports that Egyptian stocks had become very much overvalued and were on the brink of collapse,” an Amman-based portfolio manager said. He expected Egyptian stocks to go further down before rebounding.
