Gulf stock markets reflected mixed performance this week as investors kept a close eye on the euro zone debt crisis, oil prices and the second quarter results, financial analysts said. They expected regional markets to rally in the coming weeks in response to this week's strong gains by global markets, signs of easing European sovereign debt fears and rising crude prices. “The sentiment in the market is not positive,” they said. Saudi market led in the week's close. The Saudi stock exchange, the Arab world's largest bourse, received momentum mainly from oil prices which hit $77 a barrel on Thursday. The Tadawul All Share Index (TASI) of the Saudi market climbed 3.85 per cent this week, closing at 6,346.44 points. The rally was led by the petrochemical sector, particularly the Saudi Arabian Basic Industries Corp. (SABIC) which earlier in the week signed a a credit facility agreement amounting to 1 billion dollars with Al-Inma Bank for financing part of its projects. Kuwaiti shares also suffered this week amid concerns that the Kuwaiti sovereign investments could suffer as a result of the losses incurred by British Petroleum due to the US oil spill. Kuwait reportedly owns between 6 and 7 per cent of BP's shares. Kuwait's KSE all-share index lost 0.9 per cent this week, to close at 6,583 points, its lowest level in 2010. Kuwaiti analyst Maitham Al-Shakhs expected Kuwaiti shares to pick up in the coming couple of weeks due to window-dressing operations that mark the end of June every year. United Arab Emirates shares continued to suffer this week from the fallout of the Dubai World debt and weak foreign demand, analysts said. The benchmarks of the Dubai and Abu Dhabi stock exchanges shed 1 percent and 0.4 percent to close respectively at 1,500 points and 2,515 points. Abu Dhabi's market inched lower amid a shortage of liqidity. “Liquidity is a major issue - there isn't much out there,” said Saad Al Chalabi, analyst for institutional equities at Al Ramz Securities in Abu Dhabi. “We're seeing a lot of rebalancing of portfolios. Investors are taking on more conservative, more defensive positions.” He said it could be another month of low volumes on the UAE markets, until there is clarity on the debt restructurings of state-linked Dubai World and Dubai Holding, and new lows leading to “super valuations” to lure investors back. Qatar's bourse slipped, but Bahrain's market edged higher and banks helped lift Oman's index. The general sentiment however points to markets unable to sustain any gains in the current environment. “The banking sector is improving and there was good performance in Bank Sohar,” said Adel Nasr at United Securities in Muscat. Bank Sohar gained 1.9 percent. “But we believe this is a one day move. If international markets don't perform well today and tomorrow, we'll expect the market to move down again on Sunday.”
