However, they expected last week’s recovery of global markets on hopes that the European policymakers could make progress in resolving the Greek debt ordeal could reflect positively on Middle East bourses this week.“I believe regional markets, particularly in the Gulf area, will continue to be under pressure from the euro debt crisis and bad news surrounding the world economy,” Wajdi Makhamreh, CEO of the Amman-based Noor Investments, told Arab News.
He said that the governments and financial institutions of the Arab Gulf states maintained close ties with Western economies and that, accordingly, they would remain ”vulnerable” to any developments in the United States and key European economies.
”Therefore, the success of finance ministers of the euro zone in handling the debt debacle in Greece and other beleaguered European countries will have a positive reflection on regional markets,” he added.
Saudi shares were volatile last week in response to fluctuations on global markets. The Tadawul All-Share Index (TASI) fell 0.86 percent on weekly basis, to close at 6,071.52 points, led by the petrochemical, banking and industrial investments sector.
Saudi analyst Mohammad Anqari attributed the weak performance of the Saudi market last week mainly to the “ambiguity” on the world scene due to the failure of the European policymakers to adopt blueprints for stimulating their economies parallel to that declared by the United States last week.
”The Americans have dealt positively with the crisis, but the Europeans failed so far to do so and they appeared confused,” Anqari said. He pointed out that the global crisis was putting downward pressure on Saudi banks and the petrochemical industry. “Saudi banks are in good position, but they are facing huge demand for credit due to the failure of their clients to obtain loans from Western banks,” he said.
Anqari expected prices of Saudi petrochemical products to be affected by retreating global demand resulting from recession fears. He expected Saudi stocks to remain in last week’s closing area pending fresh news from the United states and Europe ”because investment executives believe it is a risk-free area.”
The benchmarks of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi shed 0.87 percent and 0.88 percent on weekly basis, closing respectively at 1,467 points and 2,576 points.
Kuwaiti shares were the sole gainers last week mainly due to the shift of the market’s supervision to a new management.
Kuwait’s KSE all-share index gained 1.08 per cent last week, to close at 6,027 points, led by the real estate and investment sectors.
Qatar’s benchmark closed lower at 8,348 points, compared with earlier week’s close at 8,366 point, while Bahrain’s all-share index shed 0.49 per cent on weekly basis, closing at 1,265 points.
The all-share index of the Amman Stock Exchange (ASE) shed 0.8 percent last week, closing at 2,035 points.Egypt’s AGX 30 index, which measures the performance of the market’s 30 most active stocks, plunged 8.2 percent on weekly basis, closing at 4,365 points.
Losses at the Egyptian stock exchange deepened after a criminal court sentenced steel magnate Ahmed Ezz for 10 years in jail and fined him more than $50 million for corruption under former President Hosni Mubarak’s rule, analysts said.
