Analysts expect rebound

Dubai: In the short-term outlook, most analysts and traders agree that the Gulf markets have been sold off dramatically and a rebound is most likely. But there are a few, who are not so sure that surprises like Sunday's Lehman Brothers collapse and the AIG episode are over.

"In the short term, the markets are oversold from a technical point of view. So we are due for a bounce back from that perspective," said Fadi Al Said, head of equities, ING Investment Management Middle East.

He believes after such a negative trend, a consolidation and stabilisation is in the offing. "But bottoming is a process and not a one-day action... it usually takes one to two quarters. And it could be sooner here because the fundamentals are very strong," Al Said said.

But he added there should be a positive catalyst to create a new uptrend.

"The catalysts could be: very strong end-of-year results for 2008, very solid guidance and visibility for 2009 and beyond; the end of the ongoing investigation process, although I see it as positive step for the long term confidence in the market in Dubai. This will improve sentiment."

Also, analysts believe that current valuations in the Gulf region are very cheap and there are players moving in to take advantage of it.

"We have been seeing longer-term players beginning to opportunistically accumulate positions at these levels," said Fahd Iqbal, vice president, EFG-Hermes Research. "This is a definite positive sign."