The region stock markets are likely to come under increased selling pressure in the week ahead due to mounting unrest in Libya and Bahrain, but markets in the UAE and Qatar offer some attractive buying opportunities which, potentially, can limit the slide if investors take longer-term bets, market analysts say.
The civil war in Libya took a significant turn yesterday when a fighter jet fell from the sky and burst into flames as explosions rang out in the rebel stronghold of Benghazi. A day earlier, the government said it was abiding by a ceasefire and no-fly zone, but violence from forces loyal to Libyan leader Muammar Gaddafi have continued.
"Political risk may remain an overhang in the region. We therefore strongly prefer the relative stability of Qatar and the UAE, which enjoy strong oil prices that support overall balances and with them government commitments to invest in the diversification of their economies," said Jaap Meijer, Head of the bank team at Alembic HC.
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