Gulf stock markets lost ground this week despite good semi-annual results, as investors remained concerned over reports of weak world economic recovery, financial analysts said Friday. Summer vacations and the approaching Muslim fasting month of Ramadan, tentative set to start on Aug. 1, put downward pressure on prices, they added. Saudi shares were volatile this week despite better-than-expected second quarter earnings by blue chips, particularly by the petrochemical conglomerate, the Saudi Arabian Basic Industries Corp. (SABIC). SABIC this week announced a 61 percent rise in half-year profits, to SR2.16 billion. The Tadawul All Share Index (TASI) of the Arab world's largest stock exchange shed 0.3 percent on weekly basis, closing at 6,489.50 points. Saudi analyst Mohammad Anqari expected the benchmark to move between 6,400 and 6,600 points in the coming weeks as investors digest the second quarter results. "I think investors prefer to stay in this risk-free area pending fresh news," he said. Anqari attributed the market's decline despite good earnings mainly to 'liquidity shortage and caution' by traders. "I believe the Saudi market is watching global news, particularly what happens in the United States concerning the debate between the Democrats and Republicans on raising the debt ceiling," he said. Anqari said tightening would affect demand on Saudi petrochemical products, given the big volume of Saudi petrochemical exports to China. Kuwaiti shares plunged this week due to external and internal factors, analysts said. Kuwait's KSE all-share index fell 1.47 percent on weekly basis, to close at 6,078 points after hitting a seven-year low earlier in the week. According to the Kuwaiti analyst Maitham Al-Shakhs, the Kuwaiti bourse came under pressure mainly from psychological concerns that the failure to raise debt ceiling in the United States would prompt lowering the rating of US banks by rating agencies. The benchmarks of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi also closed 1.58 percent and 1.17 percent in the red this week, to close respectively at 1,523 points and 2,693 points. Qatar's all-share index shed 1.07 percent, closing week at 8,393 points, while Bahrain's benchmark closed 1.24 percent in the red, at 1,303 points. “Although Q2 reports are coming out above expectations, it seemed to be shrugged off,” said a Doha-based trader on condition of anonymity. “We are noticing selective buying on certain prices. Foreigners remain net sellers on the exchange,” the trader added.
