(MENAFN- Gulf Times) Higher oil prices and stronger global equities failed to lift most stock markets in the Middle East yesterday and trading volumes were modest, showing many investors remain wary of the longer-term outlook for stocks.
Brent oil rose nearly 2% to more than $49 a barrel while Asian and European markets climbed following a surge on Wall Street.
But this did not stimulate trade in the Gulf, where Saudi Arabia's stock index dropped 0.8%. Al Rajhi Bank sank 3.7% while miner Ma'aden, hit this week by the global sell-off in commodities-related shares, lost a further 3.1% to a nine-month closing low.
The stock market was unmoved by news that Citigroup and emerging markets-focused investment manager Ashmore Group had obtained licences to invest directly in Saudi stocks. This brings the number of foreign institutions licensed to do so up to at least three.
Inflows of foreign funds into the market are expected to remain very gradual, and local investors are worried by factors such as the weak outlook for oil prices, uncertainty over the level of government spending, and the war in Yemen.
Across Gulf Arab economies, investors are anticipating a tightening of banking sector liquidity as cheap oil cuts the flow of state revenues into bank deposits, and banks set aside money to buy bonds which governments will use to cover their budget deficits.
Dubai's stock index rose 0.7%. Blue chip Emaar Properties added 1.4% but most gains were by low-priced speculative stocks such as Arabtec, which was the most heavily traded share and gained 4.9%.
Abu Dhabi edged up 0.4%, supported by telecommunications blue chip Etisalat and First Gulf Bank, both up 0.7%.
Egypt's index slipped 0.3% as Arabia Investments dropped 4.6% but investment firm Qalaa Holdings edged up 0.6%.
Elsewhere in the Gulf, the Kuwait index edged down 0.1% to 5,721 points, the Oman index gained 0.1% to 5,791 points and the Bahrain index edged up 0.03% to 1,276 points.
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