August 24, 2017 / 5:54 AM / in a year

MIDEAST STOCKS-Oil rise may aid petchems but markets generally likely to stay sluggish

DUBAI, Aug 24 (Reuters) - An overnight rise in oil prices may help support petrochemical shares in the Gulf on Thursday but low trading volumes in recent days suggest the region’s stock markets are unlikely to rise much overall.

Brent crude futures rose 1.3 percent overnight and held onto those gains early on Thursday, while MSCI’s broadest index of Asia-Pacific shares outside Japan is up 0.4 percent.

The Riyadh index is up 2.3 percent over the last six sessions, mainly on the back of gains in real estate investment trusts and some banking shares. Technically the index is bullish, trading above its 10- and 20-day moving averages.

But technical analysts at Riyad Capital said that with average trading volumes generally weak over the last several sessions, the uptrend could reverse.

“In a retail-driven market it is not uncommon to see them booking profits ahead of the weekend or holidays,” said a Riyadh-based broker. Eid Al-Adha holidays start next Wednesday.

The Dubai-listed shares of Bahrain-based GFH Financial may be bid up after the company said its board had discussed distributing dividends “given the Group’s recent good performance”.

“This has been referred to the Central Bank of Bahrain to seek their guidance and directives as per applicable rules and regulation on the subject and based on their instructions,” GFH said. There has already been market speculation for some months about GFH possibly paying a dividend.

The Middle East’s largest listed port operator, DP World , reported essentially flat first-half net profit at $606 million, in line with analysts’ average estimate of $605.9 million. Revenue for the period rose almost 10 percent to $2.3 billion. Shares of DP World are up 25.6 percent since the start of the year. (Reporting by Celine Aswad; Editing by Andrew Torchia)

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