Oil’s gains boost Middle East stock markets

Reuters
Oil prices rose 1.5 percent on Thursday. (Reuters)

JEDDAH: Middle East stock markets extended gains on Thursday, helped by a rise in oil prices this week and by dovish comments from US Federal Reserve Chair Janet Yellen that pointed to a more gradual tightening of monetary policy.
US treasury yields eased following Yellen’s statement that interest rates could not rise “all that much further,” a positive factor for emerging markets globally.
Inflows from emerging market investors in the Gulf provided support to the Qatari and the UAE stock markets in particular, as they are both linked to the MSCI emerging markets equity index.
The Saudi market was slightly up on Thursday, with the Tadawul All-Share Index 0.18 percent higher day on day.
Some companies’ results began to come out over the past few days, and they have generally been above expectations. This has given some strength to the Saudi stock market, in particular in the consumer and the financial sector.
Banque Saudi Fransi and Al-Rajhi Banking & Investment have both increased their dividends’ pay-outs — an unexpected move that lifted the whole banking sector in Ƶ.
Al-Rahji was up by 1.2 percent on Thursday, while Bank AlJazira was the one registering the highest gains, climbing 2.7 percent day on day.
On the consumer side, Jarir Marketing announced on Thursday a net second quarter profit of SR157.8 million, confirming expectations of a strong performance by the consumer sector after the Saudi government’s decision to reinstate the public sector workers’ allowance that had been cut last October because of pressures on the state’s coffers.
In the UAE, the Abu Dhabi stock exchange went up 2.46 percent, while Dubai gained 1.23 percent on Thursday.
First Abu Dhabi Bank was up by 3.94 percent on expectations of positive financial results. Union National Bank rose by 3.68 percent on the back of an increase in its second quarter results, as announced by the company earlier this week.
Oil prices rose 1.5 percent on Thursday. Brent crude was up 70 cents at $48.44 a barrel by 1527 GMT. US light crude was 70 cents higher at $46.19.
“The market is trying to stabilize,” said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut.
“The market is having difficulty picking its head up,” McGillian said.