JEDDAH/DUBAI: Rising oil prices pushed six of the seven Gulf Arab indexes higher and Egypt also advanced as world stocks reached a one-week high.
Dubai’s index made the biggest regional gain, climbing 3.6 percent to a new 2009 closing high as property stocks soared, with bellwether Emaar Properties surging 4.5 percent, although it failed to break the psychologically important 4 dirhams level.
Other Dubai stocks are on the cusp of similar milestones and bigger volumes will be required to move convincingly higher, analysts said.
Deyaar and Union Properties climbed 4.7 and 14 percent respectively and together claimed a larger trading volume than all other Gulf indexes apart from Kuwait. “As long as Dubai holds above 2,000 points and oil remains above $70, it looks like its rally will continue in the short term,” said Sunil Dhall, vice-president at Gulf Baader Capital Markets in Muscat.
“In the long term I continue to believe that prices have gone way ahead of an improvement in fundamentals, but at this point fundamentals don’t matter because this is a liquidity-driven rally.”
Oil topped $71 a barrel yesterday, having hit its highest close for seven months the day before.
“Oil prices have a big importance for Gulf sentiment, especially among international investors,” said Mohammed Yasin, Shuaa Securities chief executive.
“These are government-based economies and whenever oil is above $55 a barrel it means governments will have a budget surplus. This gives confidence that state infrastructure projects will continue and therefore the economy will grow.”
Oil’s rise pushed regional petrochemical firms higher, with crude prices seen as a proxy to global trade and therefore likely future demand for petrochemical products.
Industries Qatar rose 4.2 percent and Saudi Basic Industries Corp. (SABIC) climbed 2.1 percent, helping the Doha and Saudi indexes to post gains. While Qatar’s QSI climbed 1.3 percent to 7,315 points, Saudi Arabia’s Tadawul All-Share Index (TASI) rose 1 percent to 5,941 points.
“It’s difficult for TASI to seek and maintain new highs relying solely on the petrochemical sector while the financial sector is taking a back seat,” said the Jeddah-based Financial Transaction House (FTH) in its daily market commentary.
Abu Dhabi advanced 1.8 percent as banks and property stocks gained. Egypt’s index rose 2.2 percent to end a three-session losing streak.
— With input from agencies
