Oil May Be Key Driver Of Cautious Gulf Markets

Gulf stock markets may keep tracking volatile oil prices on Wednesday in the absence of other strong catalysts. Also, investors may be cautious ahead of the U.S. Federal Reserve’s policy statement and U.S. oil inventories data due later in the day.

Brent oil edged down towards $53 per barrel in Asian trade on Wednesday as U.S. crude inventories were forecast to have surged for the tenth straight week to a new record high.

Oil’s fresh weakness has weighed on all Gulf markets this week, with benchmarks in Dubai and Saudi Arabia showing most volatility.

On Wednesday, Dubai may come under pressure from stocks no longer carrying the 2014 dividend, such as bourse operator Dubai Financial Market and low-cost carrier Air Arabia .

In Saudi Arabia, among ex-dividend stocks are Saudi Hollandi Bank, Advanced Petrochemicals Co, Saudi Cement and National Agricultural Development Co .

However, Savola Group may gain after announcing it has obtained all necessary approvals for the sale of its packaging unit and its subsidiaries to Takween Advanced Industries.

Savola said it would book a capital gain of 265 million riyals ($70.7 million) from the sale in the first quarter.

Qatar’s bourse said on Wednesday that Medicare Group would leave its main index from April 1, to be replaced by Aamal Holding. However, the benchmark is not widely used by investors, so the impact on the stocks may be limited.

Egyptian investors may react strongly to the expected fourth-quarter results of cable maker El Sewedy Electric , which surged 8.0 percent in anticipation on Tuesday. The company’s third-quarter profit rose 75 percent.

On global markets, Asian stocks were mixed on Wednesday morning, with markets waiting for the U.S. Federal Reserve to hint when will hike interest rates.

Source: Reuters