(dpa) - Arab stock markets are passing in a consolidation phase with investors resorting to blue chip firms to hedge themselves against inflation pressures, financial analysts said Friday.
"Despite profit-taking moves that put downward pressure on some Arab bourses this week, we believe markets are passing in a consolidation phase prior to fresh advances," Wajdi Makhamreh, Deputy CEO of Amman-based Osoul Brokerage Co., told Deutsche Presse-Agentur dpa.
"I think investors in Jordan and other Arab countries are obsessed with hedging themselves against the mounting inflation pressures by purchasing raw material firms and other blue chip companies," he said.
Makhamreh believed that soaring oil prices and the huge surplus petrodollars accruing to Arab oil producers in the Gulf region were giving rise to unprecedented liquidity that seeks investment outlets.
Saudi shares lost some ground this week as investors preferred to stand on the sidelines pending clues to the first quarter results of listed firms.
The Tadawul All Share Index (TASI) of the Saudi stock exchange shed 0.9 per cent, closing week at 9,891.80 points down from 9,984.58 points last week.
TASI is currently 11.5 per cent lower than the year's start, according to the weekly report of the Riyadh-based Bakheet Investment Group (BIG).
"Investors' sentiments have been affected by unjustified psychological worries related to the market's next trend", the report said.
The BIG expected the market to "lean towards stability in the next period until the release of the first quarter results."
However, there is a potential chance of witnessing "gradual increases" in prices of Saudi stocks, given expectations of good profits in the first quarter and the encouraging macroeconomic indicators in the light of rising crude prices, the group said.
Jordanian shares steadied this week making benefit from a sustained demand on strategic stocks, mainly the Arab Potash Co., the Jordan Phosphates Mines Co., the Jordan Petroleum Refinery and the national carrier, Royal Jordanian.
The all-share price index of the Amman Stock Exchange gained 3.06 per cent this week, to close at 8,623 points up from 8,367 points last week, according to the ASE weekly report.
Kuwaiti shares fluctuated this week under profit taking pressures, but the KSE all-share price index gained 0.8 per cent closing at a record high of 14,270 points compared with last week's close at 14,157 points.
The all-share index of the United Arab Emirates stock exchanges of Dubai and Dubai declined 1.9 per cent this week apparently in response to plunges at Southeast Asian markets, analysts said.
The UAE benchmark price closed at 6,008 points from 6,125 points last week.