Global rally may have positive impact on GCC
A rally in global markets and oil prices during the weekend is expected to have a positive impact on GCC stock markets this week. However, the levels of turnover will decide the pace of such upside movements in regional markets.
The positive impact of surging oil prices above $80 per barrel was clear in Saudi Arabia yesterday as the stock market advanced thanks to petrochemical stocks.
Such positive movements are projected to spread in other regional markets which will open today and this will push indexes higher.
However, the general low turnover in GCC markets remained the main issue which hinders a strong rally in the markets. Institutional and high net worth individuals in the region remained on the sidelines waiting for strong motives to inject new liquidity in the market and this trend continued during the past two months.
However, recent reports showed signals that some liquidity started to enter GCC markets targeting selected sectors and stocks. Credit Suisse said that trade volumes picked up in Saudi Arabia's All Shares Index. "We are starting to see sidelined cash re-enter the markets."
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