Abu Dhabi: The regional stock markets are likely to rally post Eid as the second quarter corporate earnings of blue-chip companies have by and large exceeded the markets’ expectations and the downside risks on the global financial markets have lately abated which is encouraging investors to buy into riskier assets, say experts.
The global markets have been rallying in the anticipation there would soon be an announcement of a third round of quaqtitative easing (QE-3) by the US Federal Reserve to shore up a flagging US economy. As well, the markets expect the European Central Bank to do its own QE by buying sovereign bonds of debt-laden countries such as Italy and Spain to drive down borrowing costs.
The region’s markets are currently closed for Eid holidays. The UAE markets will resume trading on Wednesday. Other stock markets in the region are also expected to re-open by next Sunday.
“Considering that the global markets have more or less stabilised following a recent statement by the European Central Bank chairman that they would do whatever it takes to defend the Euro, the regional markets are likely to follow their seasonal pattern, which is, a rally, post-Eid,” Haissam Arabi, chief executive officer for Dubai-based GulfMena Investments told Gulf News.
“If we look at the trading volumes in recent days, they have picked up, particularly in real estate companies, which means investors have positioned themselves for a post-Eid rally. The real estate sector in the UAE, particularly in Dubai, is well on its way to recovery,” Arabi added.
