Middle East markets extend gains

Gulf Arab markets edged higher on Thursday, extending a week-long rebound as investors became more comfortable with heightened geopolitical risk and stock volatility eased. "The market was overdone to the downside, so we saw a strong rebound and it will return to levels where daily moves of 1 to 2 percent will again be the norm," said Robert Pramberger, acting head of asset management at Doha's The First Investor.
"When people are less worried, more long-term investors will come in." Qatar's index, bolstered by the country's buoyant economy, took its weekly gains to 9.9 percent. "The fundamental factors that underpin growth prospects are still intact, given the high oil prices and the ambitious economic and social programs put forth by the regional governments," said Shakeel Sarwar, head of asset management at Securities & Investment Co in Bahrain. "Markets are likely to be up for the year." Industries Qatar) climbed 1.2 percent, with the chemicals producer likely to benefit from oil price gains.
"Although Industries Qatar's (IQ) fourth-quarter earnings were a disappointment, we're looking for a very good 2011 for the company," said Ankit Gupta, senior research analyst at Securities & Investment Co (SICO) in Bahrain. He forecast IQ's full-year earnings would rise 30 percent this year, while the stock is trading at a forward price-to-earnings ratio of less than 10.
Kuwait state funds have been buying heavyweight stocks this week, said Naser al-Nafisi, general manager for Al Joman Center for Economic Consultancy in Kuwait, with rising volumes - Thursday's trade was a three-week high - helping the country's index rally from Monday's six-year low. Gulf Bank and Burgan Bank climbed 6.1 and 4.3 percent respectively. "When there is government intervention, it's usually concentrated on banks and other blue chips," said Nafisi.
Conversely, Saudi firms were trading at attractive levels and so offered a good buying opportunity for state funds, but the Kuwait investment case is less favourable, Nafisi said, with many shell companies listed on the market and lower corporate governance standards.
Oman trading fell by nearly half from a day earlier, with retail traders wary ahead of planned protests in Saudi Arabia on Friday, said Adel Nasr, United Securities brokerage manager. Institutions accounted for about 60 percent on Oman's trading this week, up from 45 percent last week, Nasr added. More than 32,000 people have backed a call on Facebook to hold two demonstrations in Saudi Arabia this month, the first on March 11 and then March 20, while authorities have said protests would not be tolerated.