Gulf Markets rebound from Sell-offs over Yemen Conflict

Middle East stock markets mostly surged on Sunday after brief sell-offs at the end of last week triggered by the escalation of military conflict in Yemen.

Saudi Arabia and its allies, including other Gulf nations and Egypt, have launched air strikes against the Houthi militia and have not ruled out the use of ground forces.

The intervention in Yemen may be protracted; a Gulf diplomatic official told Reuters on Saturday that while the Arab alliance initially plans a month-long campaign, the operation could last five or six months.

But while the start of the operation triggered profit-taking by retail investors, many analysts think the Gulf states will be able to confine the conflict to Yemen’s borders, as they have with past instability in that country. The operation may cost the Saudi government billions of dollars but with over $700 billion of net foreign assets, it can afford the cost.

The main Saudi index climbed 1.9 percent, largely because of property developer Jabal Omar, which surged 5.8 percent. The company said on Thursday it had sold residential units worth 70.1 million riyals ($18.7 million) and would use the proceeds to fund further construction.

Saudi Kayan Petrochemical Co jumped 2.7 percent after it restarted its olefins plant in Jubail following an extended shutdown. Its parent company Saudi Basic Industries Co (SABIC) gained 1.0 percent.

Meanwhile, Saudi International Petrochemical Co (Sipchem) slipped 0.3 percent after the company said its affiliates would shut down two plants for maintenance.

UAE, EGYPT

Dubai’s index rose 0.9 percent as most stocks rose. Builder Arabtec was the most traded stock, jumping 3.6 percent to 2.30 dirhams after bouncing from a 14-month low of 2.08 dirhams in the previous session.

Abu Dhabi’s bourse slipped 0.06 percent. Large lenders First Gulf Bank and National Bank of Abu Dhabi , down 2.1 and 1.8 percent respectively, were the main drags.

Qatar’s bourse added 0.7 percent as Ezdan Holding jumped 3.6 percent, recovering from a slide in the previous session when it went ex-dividend.

Markets in Kuwait and Oman rebounded widely and rose 1.6 and 1.2 percent respectively after dipping at the end of last week.

Egypt’s market inched up 0.1 percent. Juhayna Food Industries was the main support, jumping 2.3 percent. The company announced a 0.1 pound dividend this month, having paid none for 2013. Also, another firm in the same sector, Edita , priced its public offer at the top of the announced range at the end of last week.

Electro Cables Egypt rose 1.0 percent after posting a 466 percent increase in 2014 net profit.

SUNDAY’S HIGHLIGHTS

SAUDI ARABIA

* The index rose 1.9 percent to 9,071 points.

DUBAI

* The index added 0.9 percent to 3,438 points.

ABU DHABI

* The index inched down 0.06 percent to 4,370 points.

QATAR

* The index rose 0.7 percent to 11,488 points.

EGYPT

* The index added 0.1 percent to 9,063 points.

KUWAIT

* The index rose 1.6 percent to 6,323 points.

OMAN

* The index climbed 1.2 percent to 6,189 points.

BAHRAIN

* The index added 1.0 percent to 1,459 points.

Source: Reuters