Amman: Arab stock markets rallied last week, drawing momentum from global market gains, better world recovery outlook and stable oil prices, financial analysts said yesterday.
They expected Arab markets to extend gains in the coming weeks in response to improving business sentiment in the United States and Germany and the resulting positive impact on Wall Street and other key world stock markets.
"I believe Arab stock markets are in a consolidation phase which paves the ground for further gains, given the rally at global markets and the jump in business sentiment in the world's major economies," Nizar Taher, chief of brokerage at the Jordan Ahli Bank, told the German Press Agency DPA.
He said that oil prices, which appeared to have stabilised at over $75 (Dh275) a barrel over the past couple of weeks, will help regional markets, particularly in the Gulf region, to score fresh gains.
However, Taher and other Arab analysts believe that the liquidity crunch sill represented the key factor that impeded Arab stock markets from catching up with world bourses.
Saudi stocks scored fresh gains at the start of the week, but dipped later due to profit-taking.
The Tadawul All Share Index (Tasi) of the Arab world's largest stock exchange, gained 2.9 per cent on a weekly basis, closing at 6,266.81.
"I believe Tasi has established a strong base over the 6,000-point level," Saudi analyst Tarek Madi said.
"The basic weakness remains in the liquidity shortage which is a phenomenon shared more or less by all Arab stock markets," he added.
Blue chip demand
Jordanian shares rebounded last week, reflecting improving liquidity and foreign buying, Taher said.
The all-share index of the Amman Stock Exchange gained 1.17 per cent last week, closing at 2,334, according to the ASE weekly report.
Kuwaiti shares also closed in the green last week due to improving demand for blue chips, analysts said.
Kuwait's KSE all-share index gained one per cent last week, to close at 6,654.
UAE stocks were volatile last week, analysts said. The benchmarks of the Dubai and Abu Dhabi stock exchanges shed 1 per cent and 0.2 per cent on weekly basis.
