Gulf stocks may be soft Monday after the global environment weakened, with oil and Asian equities pulling back amid concern that a U.S. Federal Reserve gathering this week in Jackson Hole, Wyoming may signal the U.S. central bank is gearing up to hike interest rates.
Brent crude has dropped 1.3 percent to $50.20 a barrel in Asian trade while MSCI’s broadest index of Asia-Pacific shares outside Japan is down 0.7 percent.
There is little fresh, positive news to push Gulf markets up. Dubai’s stock index, last at 3,560 points, has retreated twice since last week from technical resistance at its April peak of 3,605 points.
Dubai-listed GFH Financial may attract interest after it said it had signed a memorandum of understanding with Bahrain’s Bank Al Khair for a potential acquisition of a majority stake in the bank.
GFH said the acquisition would create a larger financial group with operations in the Gulf, Britain, Malaysia, Turkey, Pakistan and India, though a deal would depend on many conditions being met including due diligence, and no financial details were given.
Saudi Arabia’s index, last at 6,212 points, is close to confirming a break of technical support on its early August low of 6,226 points. This would be very bearish, triggering a major right triangle formed by the highs and lows since April and pointing down to the 5,600-point area in the medium term.
Source: Reuters
