Hope for resolution to Qatar dispute may buoy Gulf
Hope for a resolution to Qatar’s diplomatic dispute with four other Arab countries may buoy Gulf stock markets on Monday, while Saudi Arabia may also stay firm because of its technical breakout on Sunday.
Qatar’s foreign minister said late on Sunday that Qatari Emir Sheikh Tamim bin Hamad al-Thani was expected to attend the annual summit of Gulf Arab heads of state in Kuwait on December 5 and 6.
There was no immediate comment from other Gulf nations on the Qatari announcement, and events at the summit are difficult to predict. Nevertheless, some investors hope Sheikh Tamim’s attendance could be a step towards renewed dialogue with Saudi Arabia, the United Arab Emirates, Bahrain and Egypt.
On Saturday, former Yemeni president Ali Abdullah Saleh signalled he was abandoning his support of the Iran-aligned Houthis – a shift that could pave the way to end three years of war in Yemen. So the Gulf may have a chance of easing two geopolitical crises that have weighed on markets in recent months.
The Saudi stock index rose for an eighth straight day on Sunday, gaining 1.2 percent to 7,089 points and climbing above technical resistance around 7,000 points, which has capped the market since mid-October and roughly coincides with the 200-day average at 7,014 points.
A clean break of the resistance – two straight daily closes – would point up to around 7,250 points, according to the height of the former downtrend channel dating back to mid-October.
In the United Arab Emirates, where markets reopen on Monday after a long weekend, Dubai Investments announced it had raised its foreign ownership limit to 49 percent from 35 percent. But since the current actual ownership of all foreign investors is under 17 percent, there is no reason to expect any immediate impact on the stock.
The global market environment is mixed, with MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.4 percent and Brent oil slipping 35 U.S. cents to $63.38 a barrel, drifting away from a near 2-1/2 year peak of $64.65 touched last month.
Source: Reuters
