However, they expected the robust oil prices and results of
petrochemical and related sectors to remain a key factor that backs regional
markets.
“I believe Arab stocks will suffer further as a result of
the turmoil in Tunisia and Lebanon which is expected to convince foreign
investors to liquidate their holdings and seek investment outlets elsewhere,”
Wajdi Makhamreh, CEO of the Amman-based Noor Investments brokerage, told Arab
News.
In addition to the geopolitical concerns, Makhamreh also
attributed the retreat of Arab equities last week to a profit taking move that
was fuelled by reports of poor earnings for certain sectors, including banks,
and China’s hiking of interests rates.
“Nevertheless, we think the strong crude prices and the
expectedly high prices of petrochemical products will serve as a catalyst for
Arab markets, especially in the Gulf region, in the coming weeks,” he said.
Egyptian stocks led the plunge with scared investors
resorting to sell-off to avoid losses if the turmoil extends to Egypt, analysts
said.
Egypt’s AGX 30 index, measuring the performance of the
market’s 30 most active stocks, dived 6.4 percent last week, closing at an
11-week low of 6,698 points.
Saudi stocks also lost ground last week due to profit taking
despite the declaration by the market’s leader, the Saudi Arabian Basic
Industries Corp. (SABIC), that it had posted an increase in profits of 138
percent in 2010, to $5.76 billion.
The Tadawul All Share Index (TASI) of the Arab world’s
largest bourse shed 0.89 percent on weekly basis, closing at 6,657.78 points.
The liquidity for the week came in at SR19.26 billion as
compared to SR18.74 billion for the past week.
On a week-to-week basis, the sector activity was mostly
negative with 13 out of 15 sectors closing with loses ranging from -0.13
percent by the Retail sector to -3.18 percent by the Media and Publishing
sector. On the other hand the gaining sectors for the week were the Industrial
Investment with 0.11 percent and the Banks & Financial Services with 0.41
percent, the Financial Transaction House reported in its weekly market
commentary.
However, Saudi analyst Mohammad Anqari predicted that SABIC
and other petrochemical firms would spur the Saudi stock exchange through
higher prices of petrochemical products that would lead to higher earnings
later in 2011.
“Stronger world demand for crude and petrochemical products
will mean larger profits for SABIC and other petrochemical firms,” Anqari said.
He played down expectations of lower profits for the banking
sector due to toxic loans. “The allocations for bad loans will not be the main
problem for the banking sector. The main issue for banks lies in their abundant
liquidity and if they decide to expand lending,” he said.
Jordanian shares were volatile last week, as investors
resorted to profit taking after last week’s gains, Makhamreh said.
The all-share price index of the Amman Stock Exchange lost
0.88 percent on weekly basis, closing at 2,447 points, according to the ASE
weekly report.
Kuwait’s KSE all-share index lost 0.58 percent last week, to
close at 6,896 points.
United Arab Emirates shares also lost ground led by the
investment and real estate sectors.
The benchmarks of the Dubai and Abu Dhabi stock exchanges
shed 0.97 percent and 1.4 percent, closing respectively at 1,609 points and
6,684 points.
