13/10/2010
Mideast markets look positive on upward trend
Most Middle East stock markets are set to open higher on Wednesday as markets gain in Asia and oil prices rise above $82 a barrel, signaling a positive sign for investors awaiting third quarter results.
Asian stocks are up with tech-linked shares leading the way following an upbeat fourth-quarter forecast from computer chipmaker Intel.
U.S. stocks hit a five-month high on Tuesday. The S&P 500 index is up 11.3 percent since the start of September.
Banks in Saudi Arabia are under some selling pressure after its central bank governor said they should be conservative and provisions for non-performing loans should exceed 100 percent of their value.
Two of Saudi's biggest banks posted lower-than-expected third-quarter earnings on bad-loan provisions.
Al-Rajhi Bank , the Gulf's biggest Islamic lender by market value, reported a 8.6 percent fall in third-quarter earnings, missing the average estimate of a 9.2 percent rise in a Reuters poll of analysts.
SAAB , HSBC's Saudi affiliate whose profitability has been hit most by bad loan provisions since the start of 2009, reported a 26.5 percent drop in quarterly profit, also missing the average estimate of a 0.3 percent increase in a Reuters poll of analysts. But the overall outlook for the region is positive, analysts say.
"The overall trend for Saudi is upwards but investors at the moment are waiting for Q3 results. There is also an issue with asset allocation with investors looking to other markets, mainly UAE, which is cheap," says Musa Haddad, head trader in the asset management group at NBAD.
Real Estate stocks weighed on the UAE markets on Tuesday as Dubai's index and Abu Dhabi's benchmark slipped a few points.
Kuwait is expected to continue high volume trading as investors are optimistic of third quarter earnings especially from the banking sector. Kuwait Finance House rose 3.3 percent as did Al Ahli Bank <ABKK.KW>. Gulf Bank climbed 3.9 percent. (Rueter).
