Thursday, 27 August 2015 11:26
DUBAI: An improved global backdrop looks set to boost Middle East stocks on Thursday although concern about the long-term oil price trend is likely to keep many investors cautious.
Though most Gulf stock markets pulled back on Wednesday, the strong rebound on Tuesday, during which some institutional investors returned to buy selected stocks with valuations that they now saw as reasonable, created a sense that markets had established at least short-term floors.
A better global environment on Thursday may now encourage more bargain-hunting in blue chips, while local retail investors may feel free to return to speculative stocks.
MSCI’s broadest index of Asia-Pacific shares outside Japan is up 1.9 percent, pulling away from a three-year low hit earlier in the week, while Brent crude oil is up 2.3 percent and above $ 44.0 a barrel.
US stocks rallied on Wednesday on expectations that the Fed will hold off from hiking interest rates next month because of global uncertainties; New York Federal Reserve President William Dudley said the prospect of a September rate hike “seems less compelling”.
This may aid interest rate-sensitive Dubai property stocks, though it could be seen as modestly negative for Saudi Arabian banks, which stand to benefit from higher rates because of their low-cost deposit bases.
In Dubai, DP World posted earnings that were in line with analysts’ estimates; it reported a 22 percent rise in first-half net profit to $ 405 million, while analysts had predicted a mean $ 400 million, according to Thomson Reuters data.
