Gulf markets may consolidate amid global caution

Less buying ahead of Q3 earnings
By Reuters
Wed 25 Sep 2013 10:58 AM

Gulf bourses may consolidate on Wednesday because of a lack of domestic newsflow, the fact that some indexes have neared major technical resistance, and soft global markets.

Analysts expect most Gulf markets to lose steam after sharp early-year gains, although retail investors have continued to bid up some small-capital stocks. Many institutions are reluctant to buy heavily ahead of third-quarter corporate earnings, to be announced next month.

"If Q3 numbers confirm Q2 growth levels, we won't see a huge move on prices," says Mohammed Ali Yasin, managing director of Abu Dhabi Financial Services.

Asian shares are down on Wednesday morning because of concern about a possible shutdown of the U.S. government in a political dispute and uncertainty about the U.S. Federal Reserve's policy outlook.

Dubai's main index, which ended Tuesday at 2,716 points, is now very near August's multi-year peak of 2,762 points, which may not break without major, concrete positive news.

Sheikh Ahmed bin Saeed al-Maktoum, chairman of Dubai's Supreme Fiscal Committee and uncle of the emirate's ruler, told reporters on Tuesday that Dubai's government was working on new rules to protect the real estate market and prevent any excessive rise of property prices that could end in a crash.

But Sheikh Ahmed did not give any details of the proposed rules and there is no sign that Dubai is contemplating strong action such as fees on real estate activity, so the stock market looks unlikely to react.

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