Bearish Stock View Playing Out

July 2008 | Market Strategy

Gulf equity markets are all looking weaker this morning, in line with the renewed bearish call we made last week (see GCC Stocks: More Downside Ahead, July 9). In the light of high levels of volatility in global financial markets, rising political risk (vis-à-vis Iran), the medium-term potential for lower oil prices and a depreciating dollar, we stand by this negative position. Although there has been less bearish action in the Omani and Bahraini bourses so far, we attribute this to lower liquidity rather than any fundamentally healthier outlook. Further downside risks ahead all round.

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