Gulf markets may firm, Egypt stall
Egyptian stock exchange - YOUM7 (Archive)
By

Stock markets in the Gulf may be firm on Thursday as investors’ mood has started to improve after oil prices firmed, but Egypt may stall as investors worry about a possible interest rate hike, currency devaluation or both.

Brent futures have risen back to around $37 a barrel amid a growing belief that oil prices may have bottomed, fuelled by Saudi Arabia’s decision to raise prices for Asia.

Also, purchasing managers’ indexes released on Thursday showed non-oil business activity in both Saudi Arabia and the United Arab Emirates accelerating slightly in February from January’s multi-year lows.

Dubai’s stock index pulled back on Wednesday as traders dumped Arabtec after its shares jumped their 15 percent daily limit twice this week. Amlak Finance, an Islamic investment, firm was also sold off as local traders turned a quick profit.

However, the drop of speculative stocks may encourage a rotation into blue chips if longer-term traders rebuild their portfolios.

Egypt’s bourse has been struggling, however, in weak volumes. The Egyptian purchasing managers’ index for February showed business activity there shrank for a fifth straight month.

“Investors may not want to commit a portion of their funds to equities when they may see their returns hit by a currency devaluation,” said a Cairo-based trader.

Recommend to friends

Leave a comment