An­a­lysts say Syria strike isn't caus­ing panic in Mideast mar­kets

The Star Malaysia - StarBiz - - Foreign News -

DUBAI: Don’t ex­pect a sell­off across the Mid­dle East when mar­kets trade for the first time since the US, UK and France launched strikes on Syria, say in­vestors and an­a­lysts.

Com­pany re­sults are still in­vestors’ main fo­cus, while stocks in Qatar could per­form well af­ter the gov­ern­ment raised US$12bil from the big­gest sov­er­eign debt sale across emerg­ing mar­ket this year.

FAB Se­cu­ri­ties chief ex­ec­u­tive of­fi­cer Mo­hammed Ali Yasin said: “Peo­ple had two days to re­flect on it, and I don’t think (the strikes) will be a fear fac­tor for peo­ple to sell. What could help the mar­ket is maybe the fact that com­pany an­nounce­ments could start to speed up a bit. We heard about Qatar com­ing to the mar­ket with US$12bil in bonds, so that could maybe help the Qatari mar­ket. Apart from that, ex­pec­ta­tions for com­pany re­sults in Saudi Ara­bia are pos­i­tive, so I think it will sup­port cur­rent prices.”

Mo­hamad Al Hajj, eq­ui­ties strate­gist at the re­search arm of EFGHer­mes, said: “Life goes on. Specif­i­cally in the Mid­dle East and North Africa re­gion, po­lit­i­cal risk has al­ways been there. For the past 20 years, if you’re in­vest­ing in MENA eq­ui­ties, geopo­lit­i­cal risk is one of the con­cerns. But if we look at re­turns since the Arab spring, for ex­am­ple, banks like CIB in Egypt have de­liv­ered re­turns bet­ter than emerg­ing mar­kets. The lead­ing com­pa­nies in the GCC de­liv­ered re­turns bet­ter than emerg­ing mar­kets. So if you pick the right com­pa­nies and the right coun­tries, I think you will do well.”

Da­man In­vest­ments man­ag­ing di­rec­tor Na­bil Al Ran­tisi said: “The UAE mar­kets have been very re­silient re­cently. And there doesn’t seem to be room for mar­kets to go down from here. Mar­kets re­acted a lit­tle bit, but not dra­mat­i­cally. The is­sues in Syria have been there for a long pe­riod time, and I don’t think there will be a ma­jor panic start­ing now.”

John Sfakianakis, di­rec­tor of eco­nomic re­search at Gulf Re­search Cen­ter, said: “This is a breather for mar­kets. Last week, the Saudi mar­ket went down quite sub­stan­tially, and that was due to the an­tic­i­pa­tion of the strikes of the west­ern coun­tries into Syria. This is now be­hind us. I think it’s a one off event, mar­kets will take re­lief in to­day’s ses- sion and I think the Saudi mar­ket will con­tinue to rise given that this is now be­hind us.”

In oil mar­kets, “we see geopo­lit­i­cal risk pre­mium com­ing in. And we are also see­ing that the is­sue of the oil glut is dis­si­pat­ing”. The mar­ket is less over­sup­plied. Even with oil price above US$70 a bar­rel, Saudi Ara­bia would like to see it closer to US$80.

“We should see oil stay­ing around the US$72-US$74 per bar­rel mark, given that the sup­ply is­sue is now weath­er­ing away,” said Sfakianakis. — Bloomberg

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