Regional markets to stay on growth track

Abu Dhabi: The region's stock markets are likely to continue last week's rally this week, buoyed by robust global oil prices, better than expected US employment data for January and positive news flows from Europe which indicate the Eurozone sovereign debt crisis is manageable, analysts say.

"Investors are back in the market. In Saudi Arabia, the prevailing high oil prices and talk about the government allowing foreigners to buy and sell shares on its market are acting as catalysts, while in the UAE, the bank results, which were positive in the fourth quarter are the catalyst," Samer Darwiche, Associate at Dubai-based Gulfmena Investments Ltd, told Gulf News by telephone.

"I expect the regional markets to continue their strong performance this week, although some investors may take part in profit-taking. In Qatar, I expect the market to be flat as the dividend announcements by banks were below expectations," said Darwiche.

On Friday, Brent crude for March rose $2.51 to settle at $114.58 a barrel, while US crude futures rose $1.48 to $97.84 a barrel.

Yesterday, Saudi Arabian shares extended gains for a ninth day after a local bank signed a deal to accelerate home loans and the US jobless rate slid to the lowest level in three years, boosting the outlook for the global economy.

Index rises

The Tadawul All Share Index rallied for a ninth day, the longest winning stretch since the nine days that ended February 22 last year. The 150-member measure has extended this year's gains to 5.1 per cent. More than nine shares climbed for every one that dropped.

US payrolls increased by 243,000 last month, the most since April..

"We remain cautiously optimistic, recognising that a slip-up in Europe still has the power to drag down the markets after the recent rally," Gary Dugan, Chief Investment Officer-Private Banking at Emirates NBD, wrote in his latest weekly research note.

"It is easy to get carried away with a positive view of the markets. Interest rates are falling, markets are rising and global economic activity has surprised to the upside. To be sure, the Europeans have at least stabilised the crisis. However, we have to remain mindful that stability does not mean solutions. Europe faces a multi-year adjustment of very low growth, high unemployment and a fragile financial sector," Dugan added.