Dec 2, 2009

Mideast stocks begin to recover lost ground



Dubai: After a two-day sell-off on most Middle East stock exchanges, bourses in the region took a breather and started to rebound yesterday.

Qatar's index made the biggest jump, gaining 5.32 per cent to close at 6,949.19. Banks led the gains, with Qatar National Bank, the country's largest lender by market capitalisation, surging 5.9 per cent, and Qatar Commercial Bank climbing 3.3 per cent, as well as other blue chips. "There is no reason why firms such as Qatar Gas Transport, Industries Qatar, and Qatar Electricity should go down," said Ali Khan, managing director at Arqaam Capital.

Return of interest

Markets in Egypt and Turkey also went up. In Egypt, heavyweight Orascom's firms gained as traders saw return of foreign interest. "It is a pure recovery," says Karim Hosni from Pharos Securities. "Yesterday we were halfway and now it is complete." Turkey's National 100 index rose 2.55 per cent as funds were putting on positions again. Jordan's bourse was up 0.50 per cent.

Kuwait remained in negative territory yesterday and dropped 1.41 per cent, dragged down by heavyweights Zain and Kuwait Finance House. "Kuwait is following its own fundamentals which are not so good at the moment," said Shakeel Sarwar, head of asset management at Sico investment bank.

Bourses in the UAE remain closed due to National Day holidays and will reopen on December 6. Despite the recent sell-off, the year-to-date gains of the Dubai Financial Market index currently stand at 11.93 per cent and in Abu Dhabi at 7.66 per cent.

Trading in Saudi Arabia and Oman also remain closed until December 6.

After the decline on the UAE stock exchanges, analysts feel that the time has come to step in again as blue chips such as telecoms, airlines and several other industries have become bargains.

Etisalat has fallen to its cheapest level since July, and Aramex is expected to rally after it dropped more than seven per cent. Emaar Properties, which slumped 19 per cent in two days, and other developers are also becoming attractive, said Mark Mobius, chairman of Templeton Asset Management Ltd.

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