DUBAI: Shares in the UAE recovered some losses from the previous session on a technical rebound, while other regional markets were mixed after the global sentiment turned cautiously positive.
Surprisingly weak Chinese data and concerns over the Ukrainian crisis took down global equities this week. That triggered a long-awaited correction in UAE markets.
Renewed buying at chart support levels, however, helped the UAE rebound from multi-week lows.
Dubai’s bourse rose 1.2 percent, partly recouping losses from the past two days.
Abu Dhabi’s benchmark climbed 2.2 percent, snapping a five-session loss.
“It’s a technical rebound after the huge sell-off but I think it will be short-lived,” said Ali Adou, portfolio manager at Abu Dhabi-based The National Investor, that manages $95 million worth of assets in the region. “The correction was long overdue; low-quality names were outperforming bluechips.”
Adou said valuations in the UAE were stretched and earnings growth was needed to justify current levels.
The next market catalyst will come in the form of first-quarter earnings, he said.
“The UAE has strong economic fundamentals but the question is how much of that will trickle down to earnings,” Adou added.
Dubai is trading at price-to-earnings ratio of 18.3 times, against Saudi Arabia’s 16.1, while MSCI’s emerging market index has a forward PE of 9.86 times.
Small-cap shares led the recovery on Thursday as retail traders jumped back, a sign that long-term investors are looking elsewhere.
Cairo’s benchmark index rose 0.5 percent.
Kuwait’s share index plunged to a six-month low as investors sold off small-cap stocks, in a move that could have been triggered by the regulator’s crackdown on what it saw as speculation.
Kuwait’s Capital Markets Authority said this week it had suspended one of the local brokers from opening and managing new investment portfolios for a period of four months, accusing it of trying to manipulate the market.
According to a trader in Kuwait who spoke on the condition of anonymity, the broker in question had accounted for a significant share of local retail turnover and the move made other retail investors jittery.
The regulator has also suspended trading in shares of several listed companies this month over financial losses.
Financial analyst Majdi Sabri said senior traders were not dealing shares “to send a message of protest to show there is a big problem,” with the regulator, which is trying to impose strict rules for trading and corporate governance.
The Capital Markets Authority could not be reached for comment.
Last week, a Kuwaiti court fined the chairman of Al-Ahli Bank 1.5 million dinars ($5.3 million) over alleged insider trading in the bank’s shares.
Kuwait’s market has been historically dominated by retail traders, with much of the trading concentrated in small-cap stocks which provide better opportunities for quick, short-term gains.
Dubai and Abu Dhabi shares rebound; Kuwait slumps
Dubai and Abu Dhabi shares rebound; Kuwait slumps
OPEC+ approves gradual output increase from April amid market uncertainty
RIYADH: Eight OPEC+ producers agreed to raise oil output gradually from April, citing healthy market fundamentals and a stable global economic outlook, after ministers met virtually to assess market conditions and determine future supply policy.
Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman approved a production increase of 206,000 barrels per day for April, according to a statement.
The increase marks the start of a gradual unwinding of 1.65 million barrels per day in voluntary reductions introduced in April 2023 to shore up prices.
The move comes as the US-Israeli conflict with OPEC+ member Iran and Tehran’s retaliation have disrupted shipments in the Middle East. Oil, gas and other cargoes moving through the Strait of Hormuz have faced interruptions since Feb. 28 after shipowners received warnings from Iran that the area was closed to navigation, Reuters reported.
In a statement released after the talks, the eight nations cited a “steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories,” as the rationale for the measured production increase.
The statement stressed that the full 1.65 million bpd “may be returned in part or in full subject to evolving market conditions and in a gradual manner.”
They also stressed they retain flexibility to increase, pause or reverse the supply hike if needed. That includes the option of reinstating cuts announced in November 2023, when several members pledged additional voluntary reductions totaling 2.2 million barrels per day.
The producers reiterated their commitment to the broader Declaration of Cooperation and said compliance with output targets, including voluntary adjustments, will continue to be monitored by the Joint Ministerial Monitoring Committee.
The group also reaffirmed plans to compensate for any overproduction recorded since January 2024, saying the phased increase would allow participating countries to accelerate those efforts.
Brent crude futures jumped on Feb. 27 to $73 per barrel, the highest level since July, amid fears of a wider Middle East conflict and potential supply disruptions through Hormuz, which accounts for more than 20 percent of global oil transit, Reuters reported.
Oil prices are expected to rise, with Barclays lifting its Brent crude forecast to around $100 a barrel from $80 a day earlier, while analysts said prices could jump by as much as $20 per barrel when trading resumes on March 2 if tensions escalate further.
The eight countries will continue holding monthly reviews of market conditions, conformity and compensation levels, with the next meeting scheduled for April 5.
