Analysts’ views
Because of the global sell-off, global emerging markets funds are facing heavy redemptions and are thus forced sellers of these GCC mega-caps. There are obviously some ripple-effects throughout Middle East equity markets. That being said, we note that the decline in most GCC markets today is not as pronounced as the one we have seen happening overnight in China or India.
Looking forward, we believe the bull market thesis on MENA equities remains intact as the cyclical and secular conditions remain intact. Charles Henry-Monchau/ Managing Director - CIO & Head of Investment Management at Al Mal Capital
Today’s reaction in regional markets is in sync with what we witnessed in US overnight, which affected not just the regional markets but globally most markets are deep in red. Sharp rise in interest rates spooked equity investors in US, triggering the sell –off. I think regionally, this is a good time for fund managers to position in both quality names that are affected and ones that will benefit from fund flows early next year. Nishit Lakhotia/Head of Research at SICO Bank
Saudi is tricky as it has moved up quite significantly following talks of an Aramco IPO and the market upgrade yet the new funding structure rising from sukuk and debt instruments to make up for deficits comes with its own complications and investors are not sure how the government would control its new ledger. Having said that, developments in certain Saudi sectors are interesting enough to invest in (petchems, insurance and entertainment). Issam Kassabieh, Senior Financial Analyst at Menacorp
The trend shall remain down as the index is trading below the trend reversal point at 2,845. The decline is headed towards the previous low at 2,727 and a breach below shall extend it further towards the final target at 2,668.
ADX on the other hand stands firm over the 4,860 support level, may attract renewed buying in select banking stocks from the lower support zone. Shiv Prakash, Senior analyst with First Abu Dhabi Bank Securities