Most Gulf stock markets close up after suffering sharp losses because of the renewed slide in oil prices
Most Gulf stock markets rebounded on Wednesday after suffering sharp losses earlier in the week because of the renewed slide in oil prices.
Brent futures have fallen more than 10 percent this week to their lowest levels since the spring of 2009, and traded near $50 per barrel on Wednesday.
However, some investors have decided that Gulf equities are oversold and have returned to the markets as buyers, temporarily at least.
Dubai's bourse, which had suffered more than others because it is traditionally volatile and many investors are leveraged, closed 4.4 percent higher at 3,600 points in a broad recovery on strong trading volume. Earlier this week, it fell 8.6 percent.
Shares in blue-chip real estate developer Emaar Properties jumped 5.4 percent while builder Arabtec Holdingsurged 8.9 percent.
Most other Gulf markets also rose. Abu Dhabi's index gained 2.6 percent, Qatar rose 0.7 percent and Kuwaitedged up 0.4 percent.
Saudi Arabia's bourse, which closes later in the day than other markets in the region, was up 1.3 percent.
"I think what's happening now is because of the excessive sell-offs that we have seen in the last few days," said Ali Adou, portfolio manager at The National Investor in Abu Dhabi.
"Definitely, lower oil prices will affect the region but if you take into account the valuations, companies are already trading at cheap multiples."
But investors will need some time to get used to oil's volatility after three years of stable and high prices, he said.
Some said the rebound could be short-lived.
"I don't think this is an indication of a change of trend," said Sanyalak Manibhandu, manager of research at Abu Dhabi's NBAD Securities. "This is a bit of a bounce in a continuing downtrend."
More sustainable gains could occur ahead of corporate dividend announcements which will start coming in closer to the end of January, he said.For all the latest market news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.