Saturday, Apr 02, 2011
Abu Dhabi: The regional markets are likely to open stronger in the week ahead as investors are anticipating a rise in the earnings of listed companies in the first quarter of the current financial year compared with the same period a year earlier, say market analysts.
The regional markets are also going to get a boost from higher global oil prices which are currently trading at two-and-a-half year highs.
The Saudi market performed strongly today. The other markets - mainly the UAE and Qatar also are expected to make a strong start for the week. We may see the markets in Saudi Arabia, the UAE and Qatar breaking their upper resistance points, which would require higher trading volumes, Mohammad Ali Yasin, chief investment officer at Abu Dhabi-based CAPM Investment told Gulf News by telephone.
Gary Dugan, chief investment officer Private Banking at Emirates NBD said in a research note whilst much of the Middle East and North Africa (Mena) region has struggled with the disruption of geopolitical change, the UAE has seen further evidence of a strengthening economy.
Money supply
UAE money supply growth [M2] increased to 9.5 per cent year-on-year in February up from 6.7 per cent in January. The UAE stock market has struggled to decouple from the problems of the general market due in part to the general exposure of many UAE companies to the whole region. However the stronger data gives hope for strong profits growth for domestically focused companies, said Dugan.
Alfred Fayek, another market analyst said the resgional markets will probably move sideways until political stability returns to the region, though the Eqyptian market may see more upsides, in the near term.
We remain somewhat concerned that investors are being too sanguine about the impact of the recent shock to the global economic system. The risk remains that global growth will weaken and inflation rise at a time when central banks may raise interest rates, a cocktail that is normally bad news for risk markets such as equities, said Dugan.
By Himendra Mohan Kumar, Staff Reporter
Gulf News 2011. All rights reserved.
