DUBAI Jan 9 Dubai's stock market may continue
to extend gains on Monday as global markets edge higher, while
Saudi Arabia's index is likely to be dragged by profit-taking
ahead of fourth-quarter results and as small movements in oil
prices offer little sway.
MSCI's ex-Japan Asia-Pacific shares index
rose 0.3 percent and Brent crude futures were trading at
$56.83 per barrel in early trade, down 0.5 percent from Friday's
Dubai's main index, last at 3,692 points, was
technically bullish, trading above the 200-day simple moving
average and closed on Sunday above technical resistance at the
mid-December peak of 3,659 points. A second straight close above
that level would confirm a break, leaving the next chart barrier
at the October 2015 peak of 3,740 points.
Although the majority of the active stocks on Sunday were
the small- and mid-sized ones, many investors believe that the
market still has further upside as valuations continue to be
supportive. The index is trading at a price-to-earnings ratio of
9.7 times, a discount to regional markets.
But Saudi Arabia's index, which has lost 1.0 percent
since the start of the year despite a 3.0 percent climb in Brent
futures, may continue its descent as investors ready
their portfolios for fourth-quarter results and cash out of a
market that has risen about 20 percent since November.
Many of the petrochemical shares, which are the most
vulnerable to changes in oil prices, are perceived by analysts
to be fairly priced with some trading at a premium, leaving
investors with little room to add further.
"Some of the large-cap shares, which offer attractive
dividends, will continue to hold firm, investors will not cash
out before their respective distribution days," said a
(Reporting by Celine Aswad; Editing by Amrutha Gayathri)