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Markets Should Get Boost from Greece’s Rescue

Middle East : 24 July 2011

Source: Gulfnews

The region’s stock markets are likely to get a boost in the week ahead on the successful rescue plan for Greece drawn up by fellow Eurozone member countries, say market analysts.

But the upside potential is going to be limited as the US continues to grapple with the issue of raising its debt ceiling by the August 2 deadline, they added.

“Though the markets are going to react positively on the news from Europe, second quarter financial results of listed companies, macro-economic news and liquidity in the markets are going to be factors in deciding the direction of the regional markets in the near term,” a Dubai-based market analyst told Gulf News.

He said currently the turnover on the regional markets is low due to the summer, but the trading activity in the markets is going to gather momentum after Ramadan.

“A cabinet reshuffle has breathed new life into the Egyptian market. The reshuffle has met some of the demands of the protesters who continue to press for a faster pace of reform. From our perspective Egyptian equities offer good long term value although not without some risks,” wrote Gary Dugan, chief investment officer of the private banking wing at Emirates NBD, in a research note.

“The [Egyptian] economy should recover smartly supported by the reforms of the past; and the economy has a vibrant flexible private sector that should with time show it is capable of returning to strong profitability,” he added.

The US stocks rose last week, including the biggest one-day gain since March for the Standard and Poor’s 500 Index, as Europe pledged support for Greece to end the region’s debt crisis and earnings reports drove companies from Morgan Stanley to Advanced Micro Devices higher.

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