Gulf stock markets look set to rise

Gulf stock markets look set to rise
Published: 16 March 2017 - 7:20 a.m.
By: Reuters

Gulf stock markets look set to rise on Thursday after the U.S. Federal Reserve raised interest rates as expected but signalled no acceleration in the pace of monetary tightening - good news for Gulf equities that are vulnerable to interest rates.

MSCI's broadest index of Asia-Pacific shares outside Japan is up 1.4 percent to its highest since mid-2015, while Brent oil firmed 30 cents to $52.11 a barrel after rising over a dollar overnight.

The central banks of Saudi Arabia, the United Arab Emirates, Kuwait and Bahrain raised key interest rates by 0.25 percentage point on Wednesday night; Qatar may follow on Thursday, and official rates may continue to drift up in Oman.

But this does not mean any quick, major rise in market interest rates, which have been much more affected in the past year by levels of state spending and liquidity.

Market rates in the Gulf have stabilised or even dropped back in recent months. The partial rebound of oil prices since late last year and the success of Gulf governments in making large international bond issues should keep a lid on market rates this year, Moody's said in a report on Wednesday.

Among major stocks, Abu Dhabi Commercial Bank and Qatar Navigation go ex-dividend on Thursday, which could weigh on their prices.

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