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MIDEAST STOCKS-Gulf may lose steam as oil stalls
February 21, 2016 / 5:37 AM / 2 years ago

MIDEAST STOCKS-Gulf may lose steam as oil stalls

DUBAI, Feb 21 (Reuters) - Gulf stock markets may lose steam on Sunday after rising strongly last week on hopes for a deal among oil producers to prop up crude prices.

Officials in some producing nations are still talking up the deal. Russia’s energy minister said on Saturday that consultations on it should be concluded by March 1, so there could be further surges in oil and equities prices before that date.

However, Brent crude pulled back 3.7 percent on Friday to $33.01 a barrel, showing expectations among many traders that the deal - if it goes ahead - will do little or nothing to reduce massive oil supplies already in the market.

Several major Gulf bourses are near technical resistance, where the local retail investors who bought stocks last week could sell to take profits. Saudi Arabia’s index, last at 5,884 points, faces resistance around the 6,000-point level, from which it retreated twice in late January and early February.

Dubai’s index, last at 3,093 points, faces resistance on the February peak of 3,125 points.

The latest Gulf corporate earnings have not been particularly positive. Qatar Gas Transport Co (Nakilat) posted a 12.1 percent rise in fourth-quarter net profit to 226 million riyals ($62 million), lower than the 271.1 million riyals which QNB Financial Services had forecast.

Dubai construction firm Arabtec reported a net loss of 360 million dirhams ($98.02 million) for the three months to Dec. 31, compared with a loss of 94.4 million dirhams in the corresponding period of 2014. An analyst at SICO Bahrain had forecast Arabtec would make a quarterly net loss of 123.6 million dirhams.

And Aluminium Bahrain swung to a fourth-quarter loss of 15.8 million dinars ($41.95 million), compared with a net profit of 34.6 million dinars in the prior-year period and a forecast by an analyst at SICO Bahrain, who had expected a quarterly loss of only 3.7 million dinars.

Egypt remains weighed down by its currency crisis, with the pound under pressure in the black market and yields on Treasury bills rising at auction.

The African Export-Import Bank agreed on Friday a $500 million facility with the central bank of Egypt to help Egyptian importers, but this will buy time rather than resolve the underlying problem, an endemic shortage of hard currency. (Reporting by Andrew Torchia)

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