DUBAI: Middle East stock markets look set to consolidate on Wednesday, possibly with a slight downward bias due to modest volumes and a lack of fresh buying interest, as Friday’s OPEC meeting approaches.
The meeting is widely expected by OPEC insiders and watchers to roll over existing output policies, but the possibility of a surprise – or a further drop in prices after the meeting – will keep investors cautious.
“Large orders are not being taken until there is more certainty from the upcoming meeting at OPEC,” said a Saudi-based equities trader.
Qatar’s sharp rebound on Tuesday and the Saudi market’s confirmation of support at its November lows suggest that for now, markets may have little downside. But there is little corporate or macroeconomic news to push them up.
Egypt’s index climbed 1.1 percent on Tuesday, bouncing from near technical support on the November low of 6,302 points. Locals were net buyers of stocks while foreigners continued to sell, according to exchange data.
The Egyptian central bank changed the way it allocated U.S. dollars at a foreign exchange auction on Tuesday and sought to reassure markets by repaying foreign portfolio investors a backlog of more than $500 million built up during a long-running dollar shortage – clearing the entire backlog.
This should be positive for foreign investors, but given unertainty over foreign exchange policy and how the central bank obtained the money – it may simply have started running down its limited reserves faster – it may not trigger much foreign buying of equities.