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Stock News: Gulf Markets Stabilise After Sharp Drops

Stock News: Gulf Markets Stabilise After Sharp Drops

Dubai’s bourse, which had suffered more than others and fallen 8.6 per cent this week, added 0.8 per cent in a broad recovery.

Gulf stock markets stabilised and some posted slight gains on Wednesday after suffering losses because of oil’s renewed weakness earlier this week.

Brent futures have fallen more than 10 per cent this week to their lowest levels since the spring of 2009, and traded below $50 per barrel on Wednesday.

However, some investors have decided that Gulf equities are oversold and have returned to the markets as buyers, temporarily at least. Saudi Arabia’s main index edged down 0.3 per cent in early trade on Wednesday because of weak petrochemicals but most other stocks rose.

Retailer Jarir Marketing was the main support, adding 1.6 per cent after it reported a 25.5 per cent jump in fourth-quarter net profit and a strong rise in revenues – an indication that lower oil prices have not so far hurt the overall Saudi economy.

Dubai’s bourse, which had suffered more than others and fallen 8.6 per cent this week, added 0.8 per cent in a broad recovery.

Other Gulf markets were also positive. Abu Dhabi’s index gained 1.2 per cent, Qatar rose 0.4 per cent and Kuwait edged up 0.2 per cent.

“I think what’s happening now is because of the excessive sell-offs that we have seen in the last few days,” said Ali Adou, portfolio manager at The National Investor in Abu Dhabi.

“Definitely, lower oil prices will affect the region but if you take into account the valuations, companies are already trading at cheap multiples.”

But investors will need some time to get used to oil’s volatility after three years of stable and high prices, he said.

Some said the rebound could be short-lived.

“I don’t think this is an indication of a change of trend,” said Sanyalak Manibhandu, manager of research at Abu Dhabi’s NBAD Securities. “This is a bit of a bounce in a continuing downtrend.”

More sustainable gains could occur ahead of corporate dividend announcements which will start coming in closer to the end of January, he said.

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