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From: Mahmoud Jamal
Mubasher: Analysts expect Gulf Gulf markets to continue to fluctuate over the course of the week under investor caution because of five key factors in the lead plan of the trade war between the United States and China.
US President Donald Trump announced Thursday in a tweet posted on his official Twitter account that he would impose additional $ 300 billion worth of products on Chinese products as of September 1, while talks were aimed at easing tensions between the two largest economies in the world.
The two countries have agreed to impose tariffs reciprocally since last year, when the trade battle broke out.
By the end of last Thursday's session, most of the Gulf markets, led by Abu Dhabi and Saudi Arabia, were under pressure to no longer reduce their rates after the recent historic decision by the US central bank .
After a two-day meeting, the central bank lowered its interest rates by 25 basis points to 2-2.25%, for the first time in more than 10 years since 2008.
After this landmark decision, the words of the President of the Central Bank of the United States, which have reduced the expectations of further easing of monetary policy in the future, have affected global markets, including the record losses recorded by the United States.
Seize opportunities
Economic adviser Ibrahim Al-Failakawi told Mubasher that the Gulf markets during the week will witness balanced deals that tend to calm and seize profit opportunities before Eid al-Adha's holiday. .
He added that investors would also make profits after the soaring trade war on world markets last weekend.
Traders are likely to continue in this direction until future prospects of tension are clear and the impact of reducing global interest rates is known. on the economies of the region.
Investors observe the trade war between the United States and China, the trade war between Japan and Korea, the currency war and other foreign factors affecting all the stock markets of the world.
He expected that the market would not respond clearly to the Federal Reserve's decision to reduce interest rates, which would not likely have a significant effect on short-term market performance, a natural consequence. holidays before the year of Eid.
He said that what happened before the last sessions before this holiday would be cyclical liquidity and that the main portfolios would only turn around 25% of the liquidity of the Gulf markets.
Emerging Markets
The Gulf markets after Eid will have another interest, especially the Saudi market, which will accept the completion of emerging markets as a second step in the MSCI Emerging Markets Index, said Mohamed Al Maimouni. , stock market badyst.
MSCI will launch in August the second phase of listing Saudi equities at its stock market index around the third session after returning from Eid holidays.
He pointed out that the Saudi market could, after this step, be added to other foreign funds flows between 6.3 and 8.2 billion dollars.
He pointed out that until the completion of the announcement of corporate results for the first half of 2019, markets remain in a state of anticipation.
Technically, the general index of the Saudi market for the current period and before the holiday should reach 8600 points, indicating that it could test support levels at 8,350 points.
He added that the investor will determine his calculations according to the surrounding economic and political data, so that the attribute of "hedge", a larger area of investment.
He pointed out that the Federal Reserve's decision to reduce the interest rate by a quarter of a point and that it should follow by a quarter of a point, further sign of the economic crisis .
He believes investors are afraid of the risk as long as the means to address the economic crisis are at least revealed by the reduction in global interest rates and the resulting Sino-US trade dispute.
Take profit
"Markets fell on Thursday as a result of profit taking on some of the leading stocks, particularly in the banking sector, after the Federal Reserve decided to cut interest rates for the first time since 2008" said the vice president of investment research at KAMCO in Mubasher.
Raed Diab said this decision would have a positive impact on the real estate sector in the medium term while reducing borrowing costs.
He stressed that we also expected more financial results for the first half of this year, which would have a significant impact on investor sentiment.
And waited to note some of the fluctuations in the coming period and that the proximity of the holiday of Eid al-Adha and the summer holidays.
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