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Sun 30 Sep 2012 10:03 AM

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Gulf markets wary; investors eye Q3, euro zone

Telecom operator Zain Saudi plunged 6.1 percent on loan maturity delay

Gulf markets wary; investors eye Q3, euro zone
Gulf investors are likely to be cautious on Sunday as worries over the euro zone and a downbeat performance by Saudi Arabia stocks a day earlier deter risk-taking.

Gulf investors are likely to be cautious on Sunday as worries over the euro zone and a downbeat performance by Saudi Arabia stocks a day earlier deter risk-taking.

World stocks lost ground over the weekend after Spain said it plans to ask for around 40 billion euros ($51.46 billion) in European aid to recapitalise its weak banks.

Saudi Arabia's index fell 1 percent to a two-month low on Saturday, although it held above the important support level of 6,800 points.

Telecom operator Zain Saudi plunged 6.1 percent to 10.75 riyals after saying it had extended, for a second time, the maturity date of a 9.75 billion riyal ($2.6 billion) loan.

"Regionally, I expect risk appetite to remain somewhat suppressed today given Q3 earnings - the next major catalyst - are not out yet and international markets remain in a hold-and-see mood," says Amer Khan, fund manager, Shuaa Asset Management.

"Exceptions could be Kuwait - where there is some speculation of government support - and selective high quality names in the UAE, Saudi Arabia and Qatar, reflecting investor positioning ahead of earnings.

"We saw exactly such outperformance on the part of the quality names in Saudi Arabia yesterday despite the broader index fall and this is likely to continue."

In the United Arab Emirates, Abu Dhabi Commercial Bank (ADCB) has filed a legal claim against crown prince of Dubai's Zabeel Investments, saying it failed to meet repayment obligations.

Shares in Dubai's Emaar Properties will be in focus after the developer said it has sold a hotel to an Abu Dhabi-based real estate firm for an undisclosed amount.

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