They expected Arab bourses to rally this week after several weeks of losses due to what they called as hesitation on the part of the European policymakers to adopt effective solutions.
Analysts expected Saudi stocks to surge after the pilgrimage season.
”I believe the European debt package will have a positive impact on Arab markets in the coming days,” Wajdi Makhamreh, CEO of the Amman-based Noor Investments, told Arab News.
”The package succeeded in calming down global and Arab markets on Thursday, but it could turn out to be a short-lived solution in the absence of a pack-up plan for helping European banks, particularly in Germany, which are going to suffer as a result of the writing off of a major part of Greece’s loans,” he said.
Makhamreh said that the Arab oil exporting countries in the Gulf were expected to reap additional benefits from the European deal in terms of higher oil prices due the expanding demand for crude as prospects of a world economic recovery improve.
The Saudi stock exchange, which closed last trading week on Wednesday before the declaration of the European deal, was volatile for the most part of the week, though investors appeared optimistic over the ability of the Europeans to find solutions, analysts said.
The Tadawul All-Share Index (TASI) gained 0.67 percent on weekly basis, closing at 6,147.54 points, led by the petrochemical sector.
"This closing area seemed to be very acceptable to investors who believed that they could move comfortably from here when the Europeans come up with a solution,” Saudi analyst Mohammad Anqari said.
He expected Saudi stocks to rally after the pilgrimage season which is due to reach its climax with the pilgrims’ standing on Mount Arafat on Nov. 5 and the celebration of the first day of the Muslim Eid Al-Adha feast on Nov. 6.
”I believe many investors bet on the European solution and on a sustainable global economic recovery” that leads to higher oil and petrochemical prices, Anqari said.
Most of Arab stock markets, which were operative on Thursday, rallied in response to the European deal and the resulting relief on global bourses.
Kuwait’s KSE all-share index gained 0.11 percent on weekly basis, closing at 5,902 points.
The benchmarks of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi closed 1 percent and 1.13 percent in the green, respectively at 1,380 points and 2,471 points.
Qatar’s all-share index gained 2 percent last week, closing at 8,536 points, while Bahrain’s benchmark inched higher, closing at 1,150 points compared with last week’s close at 1,147 points.
Jordanian shares rebounded last week after a series of losses, with investors appearing upbeat over the swearing in of a new government earlier this week.
The all-share index of the Amman Stock Exchange (ASE) gained 1.7 percent on weekly basis, closing at 1,990 points.
Egypt’s AGX 30 index, measuring the performance of the market’s 30 most active stocks, climbed 3.1 percent last week, to close at 4,339 points.
