The volatility is also indicative of investors’ concerns over the semi-annual results of listed firms that found expression in a profit taking, speculative move, they added.
”I believe regional markets, particularly in the Gulf area, have come under negative impact from this week’s remarks by the US Federal Reserve’s chief Ben Bernanke, indicating slow world recovery,” Wajdi Makhamreh, CEO of the Amman-based Noor Investments brokerage, told Arab News.
He said that weak global economy would lead to a retreat in world demand for oil and petrochemical products, a key moving factor for stock markets in the Gulf region.
Makhamreh also attributed last week’s slump of Arab stocks to the continuation of political turmoil in the region and the approaching second quarter results which usually prompt profit taking and speculative moves and push investors to stay on the sidelines.
However, he said oil prices over 100 dollars a barrel would spur regional stocks in the medium and long terms, given the huge surpluses due to accrue to Arab oil exporters.
Saudi shares faltered last week, led by the sectors of energy, transport and real estate development.
The Tadawul All Share Index (TASI) of the Arab world’s largest stock exchange plunged three percent on weekly basis, closing at a three-month low of 6,540.23 points.
Saudi analyst Mohammad Anqari played down the external effects on the Saudi market from the global bourses and news of slow economic recovery in the US.
He attributed the decline of Saudi shares last week mainly to ”active speculative trading, profit taking and investors’ preference to stay out of the market to await second quarter results.
Anqari expected Saudi shares to rally after the declaration of the semi-annual results in July, saying TASI could test the 7,000-point level later in the year, given high oil prices, the huge public spending and strong macroeconomic indicators.
Kuwaiti shares continued their weak performance last week due to the persistent political uncertainty and the absence of moving factors, analysts said.
Kuwait’s KSE all-share index shed 0.5 percent last week, closing at 6,305 points.
The United Arab Emirates shares reflected mixed performance last week with the benchmark of the Dubai exchange falling 0.5 percent and closing at 1,556 points, while the all-share index of the Abu Dhabi stock exchange rising by 1.15 percent, and closing week at 2,703 points.
The benchmarks of Qatar and Bahrain closed in the green, rising 0.44 percent and 0.6 percent, to close respectively at 8,276 points and 1,347 points.
Jordanian shares were volatile last week reflecting a liquidity crunch and lack of confidence on the part of traders, Makhamreh said.
The all-share index of the Amman Stock Exchange closed week marginally lower, at 2,149 points compared with earlier week’s close at 2,151 points.
Egypt’s AGX 30 index, measuring the performance of the market’s 30 most active stocks, climbed 2.7 percent on weekly basis, closing at 5,504 points due to strong demand from Arab and Egyptian investors, analysts said.
The rally at the Egyptian bourse gained strength after the government announced the cancelation of a recently adopted tax on dividends, they added.
