AMMAN: Arab stock markets reacted positively but cautiously to the election of Barack Obama as next US president with investors trying to evaluate the choices open to the new administration to deal with the grueling economic downturn, financial analysts said yesterday.
“Markets sighed with relief over the election of Obama, because markets have been under the impression that McCain’s win could aggravate the global financial crisis,” Nizar Taher, chief of brokerage at the Jordan Ahli Bank, told Arab News.
“However, investors do realize that the new US administration will need time to work out plans for dealing with the recession and hence caution is expected to prevail at global markets including Middle East bourses,” he said.
Taher detected evidence that investors in the region were “restoring partial confidence, getting rid of panic and resorting to logical factors in deciding their positions.”
The Saudi stock exchange, the Arab world’s largest bourse, rallied this week recouping part of the losses it incurred over the past month.
The market’s Tadawul All Share Index (TASI) climbed 9.86 percent this week, closing week at 6,083.87 points. TASI is currently 44.9 percent lower than the year’s start. “The Saudi market considers Obama’s win indicative of coming changes in the US economy and that it should deal with the new realities,” Saudi analyst Tareq Madi said.
“The Saudi stock exchange has also started to dissociate itself psychologically from what is going on the world markets and to turn to internal factors instead of monitoring foreign moves,” he added.
Jordanian shares also started this week to behave in isolation of developments on global markets, Taher said.
The all-share price index of the Amman Stock Exchange gained 7.40 percent this week, to close at 3,407 points, according to the ASE weekly report.
Kuwaiti shares continued to suffer in response to reports that the country’s investment companies were facing cash difficulties due to their failure to get short-term loans from foreign banks to meet their financial commitments.
Kuwait’s KSE all-share index closed week on Thursday almost unchanged at 9,675 points. The United Arab Emirates stock exchange of Dubai was the biggest regional loser this week as foreign investors continued their sell-off of UAE shares, analysts said.
The benchmark of the Dubai bourse shed 4.9 percent this week, closing at 2,798 points, compared with last week’s close at 2,942 points. Egypt’s CASE 30 index, which measures the performance of the market’s 30 most active stocks, plunged 2.08 percent on Thursday to close week at 5,243 points.
