DUBAI: Gulf stock markets are likely to be steady on Tuesday as some investors book profits from a near two-month rebound ahead of first-quarter earnings season and as a rally in oil prices takes a similar pause.
Brent crude, which has risen more than 50 percent from 12-year lows in January, was 12 cents lower at $41.42 a barrel after rising 0.8 percent on Monday.
That oil slump sparked panic selling on Gulf markets in January, but confidence has steadily returned as traders’ worst fears of a repeat of the 2008-9 bourse collapse proved unfounded.
Having hit multi-year lows in mid-January, Saudi Arabia’s benchmark is up 18.6 percent, Dubai has gained 28.8 percent and Qatar 22.6 percent.
“Following a big shake-up across equity markets globally — both developed and emerging — we have entered a period of low volatility,” said Sebastien Henin, head of asset management at The National Investor in Abu Dhabi.
“Companies in the region released decent Q4 results, with some positive surprises in terms of dividends. This combination of factors have helped support Gulf markets.”
Trading volumes in Dubai, and to a lesser extent Qatar and Saudi, have ebbed of late, indicating waning momentum as traders await the start of first-quarter earnings season in about two weeks.
“We might now have some profit taking — after such a great rally it would make sense,” added Henin.
In Riyadh, Zain Saudi may face selling pressure. It was the most traded stock on Monday, rising 3.5 percent to 9.00 riyals.
That took its gains to 27.7 percent since Reuters reported last Wednesday that its Kuwaiti parent Zain was narrowing the field of potential bidders for its mobile transmitter towers in Saudi Arabia and Kuwait.
But Monday’s close was 5.6 percent below Zain Saudi’s intraday of 9.50 riyals, indicating that investors are increasingly opting to cash in some of their recent gains.
Islamic investment bank GFH Financial Group has agreed to sell a 10 percent stake in Bahraini cement producer Falcon Cement Co, which could draw buyers to GFH’s stock.