DUBAI/CAIRO: Trading in Gulf Arab markets appears immune at times from turmoil in the wider region, judging from new highs reached this week.
Upbeat first quarter earnings from companies in Saudi Arabia spurred gains, and the petrochemical sector is forecast to outperform on rising fuel prices.
But regional stock indexes are due for a correction, analysts say, as share trading shifts to track global equities and energy prices more closely.
Brent crude rose above $122 per barrel on Wednesday as a rebound in equities and a larger-than-expected fall in US oil product stockpiles helped ease fears over eroding demand.
"I think investors are looking for pause, and new positions will be limited to mainly petrochemicals if at all," said Muhammad Shabbir, chief investment officer and head of Saudi asset management at Rasmala Investment Bank.
Dubai’s benchmark hit new peaks with investors seen buoyant on back of the country’s safe-haven status and a possible inclusion in the MSCI index with a decision expected in June.
Caution remains though until most large cap stocks in banking and real estate sector post earnings.
"Not a lot of people are expecting blazing earnings growth," said Ibrahim Masood, senior investment officer at Mashreq Bank. "Real estate and banks are still in a challenging environment."
Signs have started emerge of improving liquidity in the United Arab Emirates, one of the worst debt-hit countries in the region. Abu Dhabi’s investment fund Mubadala Development Co launches a new bond and conglomerate Dubai Investments is speaking to banks for a 1.2 billion dirhams ($326.8 million) loan.
Egypt
Investors in Egypt await Mobinil first quarter results due to be released April 27 for the first major indication of how the political unrest that toppled Egypt’s president and brought much of the economy to a temporary halt will affect company earnings.
Mobinil is considered one of the exchange’s lesser affected companies, since people continued to rely on telephones during most of the unrest, analysts say.
However, mobile companies are expected to have lost important roaming fee revenue from tourists, whose numbers have been greatly reduced by the troubles.
"First quarter results generally will be important for the market to watch," said Wael Ziada, head of research at EFG-Hermes. "The market is already expecting the recent events to impact first quarter results for most of the companies.
Egyptian real estate stocks will also be in the spotlight as probes on how the government distributed land under the ousted government move forward.
An Egyptian court will rule soon on whether the sale of state land to Palm Hills Development (PHD), the country’s second-biggest listed developer, should be scrapped.
A judicial panel concluded earlier this month the sale was illegal because it was priced too cheaply and was not publicly auctioned. The judicial body decision has in the past influenced court verdicts.
On April 14, real estate firm Egyptian Resorts said the Tourism Development Authority had retracted its approval for selling a land plot allocated for the firm’s Sahl Hasheesh resort on the Red Sea.
Egyptian markets will be closed on Sunday for Orthodox Easter and on Monday for Sham El-Nesim, a springtime festival that dates back to Pharaonic times.
