Gulf equity markets may gain on Thursday after oil prices surged overnight, but telecommunications firm Mobily may weigh on Saudi Arabia’s market if its shares start trading again after a shock 2014 earnings revision.

Brent crude surged 5 per cent on Wednesday, after Saudi Arabia’s oil minister said oil demand was growing and data showed Chinese factories were producing more than expected. It edged down in Asian trade on Thursday but held above $61 per barrel.

Gulf stock markets had traded in narrow ranges and with low volumes since oil halted its rally last week. Firmer oil is likely to boost the sentiment of investors in the region and support stocks such as petrochemicals.

The latest Reuters survey of regional asset managers, published on Thursday, shows Middle East funds are increasingly positive towards Saudi Arabia as the kingdom prepares to open its bourse to direct foreign investment.

However, Mobily looks likely to fall sharply once it starts trading. The company said on Wednesday it had swung to a full-year loss of 913 million riyals ($243.4 million) in 2014, according to audited results, and also revealed it had breached loan covenants with various lenders.

In January, the company had announced unaudited 2014 results which showed it made a full-year profit of 219.8 million riyals. The market regulator suspended the stock pending further disclosures from Mobily; it is not clear if trading will resume on Thursday, and a continued suspension is possible.

In Abu Dhabi, Mobily's largest shareholder Etisalat reported its own results on Thursday, posting a net profit of 2.10 billion dirhams ($572 million) in the fourth quarter, a 47 per cent increase year-on-year.

Three analysts polled by Reuters had on average forecast Etisalat, the Gulf’s second biggest telecommunications operator by market value, would make a quarterly profit of 2.43 billion dirhams.

The company proposed a 0.35 dirham per share cash dividend for the second half of 2014, matching its dividend for the year-ago period.

On global markets, Asian shares outside Japan are edging away from five-month highs on Thursday, while Japan’s Nikkei stock average is up 1.0 per cent to a 15-year high. Wall Street was narrowly mixed on Wednesday.

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