Gulf may have slightly firm tone on oil, global trend

DUBAI - 14 January 2018: Gulf stock markets may have a slightly firm tone on Sunday in response to positive trends in the oil price and global equity markets, although there is little fresh news within the region to spur buying.

Brent oil rose 61 U.S. cents on Friday to settle at $69.87 a barrel, a new 2-1/2 year high, while the Dow Jones Industrial Average climbed 0.9 percent.

After the close on Thursday, Saudi Arabia’s central bank lifted the maximum loan-to-value ratio for mortgages taken out by first-time homebuyers to 90 percent from 85 percent in an effort to stimulate mortgage lending.

That may only provide an incremental boost to banks’ business, however; last year, the loan-to-value rate for first-time buyers was raised by a much bigger margin, to 85 percent from 70 percent.

Saudi Binladin Group said on Saturday that some shareholders in the construction giant might transfer part of their holdings to the state in a settlement with authorities, which detained several members of the founding family in an anti-graft drive.

It is not clear what this will mean for the estimated $30 billion of Binladin debt; government ownership could help lift the group back into profit, but it could also involve a restructuring of the debt or more pressure on banks to make provisions or write off some of the debt.

Both the Saudi and Qatari stock indexes are technically short-term bullish; Saudi, last at 7,338 points, faces no major resistance before the September peak of 7,429 points. Qatar, last at 9,136 points, faces no major resistance before the July peak of 9,606 points.