Saudi bourse may reopen lower after Eid on weak global backdrop

Saudi Arabia’s stock market may be weak when it reopens on Tuesday after a long Eid al-Adha break, as oil prices and global equity prices sag.

Brent crude has dropped more than 3 percent to just above $47 a barrel since the Saudi bourse last traded on Monday last week, while MSCI’s broadest index of Asia-Pacific shares outside Japan is down 2.3 percent on Tuesday.

Also, many Saudi investors may remain on holiday this week, keeping turnover low.

The Saudi market’s weakness may dampen other Gulf bourses. Qatar and Bahrain will also reopen on Tuesday after Eid; United Arab Emirates markets have been mixed in sluggish trade since they resumed trading on Sunday.

Dubai’s Air Arabia may sees some selling after its chief executive said on Monday that its earnings might see a further negative impact for the next two quarters from fuel hedges put in place prior to the steep drop in oil prices – though he added that cheap fuel would benefit the airline in the long run.

Egypt’s market may be dampened by the poor performance of global equities. Nevertheless, the Cairo market has shown preliminary technical signs in recent days of beginning to bottom out from its long downtrend since February.

The main Cairo index’s 0.9 percent rise to 7,409 points in active trade on Monday confirmed a bullish right triangle formed by the highs and lows since late August – a positive short-term reversal pattern.

Source: Reuters