Sentiment among Gulf equity investors may improve on Tuesday if oil extends its early gains, but market activity in Saudi Arabia may decline after the regulator suspended trading in Mobily and as investors await news from index compiler MSCI.
Oil prices edged up in Asian trade on Tuesday on hopes of more economic stimulus in China after disappointing data from the world’s second-biggest economy. However, Brent crude has yet to recover from Monday’s losses and climb back above $63 per barrel.
China’s consumer inflation weakened more than expected, to 1.2 per cent year-on-year in May, raising concerns about growing deflationary pressures as the economy cools. Its producer prices fell for the 38th straight month.
Trading in Mobily halted
In Saudi Arabia, the Capital Market Authority (CMA) has halted trading in Mobily until it gets a response from the telecom operator on the likely impact on its earnings from an initial regulatory report examining accounting irregularities.
The regulator has been investigating Mobily after the firm stunned investors by slashing 18 months of previously announced profits last November.
MSCI annual market review
Later on Tuesday, after Gulf markets close, MSCI will announce the results of its annual market classification review which analysts expect will launch the lengthy process of including Saudi Arabia in the emerging markets index widely used by active and passive funds around the world.
While the actual inclusion is unlikely to happen until 2017, a positive announcement may boost market sentiment in the kingdom.
In Dubai, Amlak Finance has gained 74 per cent since returning to the market last week after a six-year suspension. However, as Dubai’s index had doubled while the stock was suspended, it may continue playing catch-up.
On global markets, Asian shares sank on Tuesday on fears of an upcoming US interest rate rise. Wall Street also slipped overnight.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.