Gulf markets may take a breather form a recent rally on Wednesday as world markets pull back and concerns arise again over Greece, while overbought markets such as Dubai could fall on profit taking.
Asia markets slipped on Wednesday as relief over Greece’s latest bailout turned to doubts that the debt-stricken country can keep to its austerity programme and concern about rising oil prices.
Brent crude edged down towards $121 on Wednesday, retreating from a nine-month high.
Dubai’s benchmark rose 1.7 percent to 1,596 points a day earlier to hit an eight-month high.
“The market is overbought in Dubai but the price trend is looking good,” said Bruce Powers, head of research at Trust Securities. “The next thing to watch out for is the degree and speed of a pullback and subsequent strength, if it comes.”
In Saudi Arabia, the markets regulator adjusted stock ownership guidelines in a bid to boost transparency on Tuesday, as the Middle East’s biggest bourse takes gradual steps toward opening up to direct foreign investment.
Foreign buyers of Saudi stocks currently do so through swap arrangements with an authorized entity in the kingdom making the ultimate owner unknown. Under the new guidelines, the actual owner of the stock will now be identified.
Investors say this could potentially bring increased interest from foreign investors in Saudi stocks.
Saudi Arabia’s bourse hit a three-and-a-half year high in higher turnover on Tuesday amid an upbeat Gulf market sentiment.
State-controlled Saudi Arabian Mining Co (Maaden) will be in focus after saying it plans to invest 21 billion riyals ($5.6 billion) in a phosphate project.
Elsewhere, Dubai’s DP World is in talks with banks for a $1-billion syndicated loan to replace its existing $3-billion deal that matures in October.
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