Mideast Stocks: #UAE stocks gain, #Saudi slips on first trading day of 2021 | ZAWYA MENA Edition

Mideast Stocks: UAE stocks gain, Saudi slips on first trading day of 2021 | ZAWYA MENA Edition

Stock markets in the United Arab Emirates (UAE) closed higher on Sunday, starting 2021 on a positive note on hopes that the rollout of a coronavirus vaccine will lift economic activity, while Saudi Arabian shares fell on uncertainty about the outlook for oil prices this year.

The UAE on Saturday recorded a fourth straight record number of daily coronavirus cases, with 1,963 new infections.

Dubai and Abu Dhabi have begun rolling out COVID-19 vaccines, which BofA said in a note are particularly pertinent for the UAE given its exposure to trade and tourism.

"We believe the vaccine provides a realistic chance that the travel & tourism sector (including attendance at the Expo) and trade could rebound more strongly than currently anticipated," said the statement.

Expo 2020, due to take place in Dubai but delayed due to the pandemic, will now take place from October 2021 to March 2022.

Abu Dhabi's stock index rose 0.7%, led by a 1.7% increase in First Abu Dhabi Bank, while telecoms firm Etisalat gained 0.7%.

The Dubai index was up 0.6%, supported by gains in financial and real estate shares. Emirates NBD rose nearly 2%, while Emaar Properties was up 1.4%.

The share index in Saudi Arabia fell 0.9% as most of its constituents closed in negative territory. Al Rajhi Bank led the losers, dropping 1.2%.

Chemical maker Saudi Basic Industries shed 0.8%, while Saudi Aramco was down 0.4%.

Oil prices are unlikely to mount much of a recovery in 2021 as a new coronavirus variant and related travel restrictions threaten already weakened fuel demand, a Reuters poll showed.

According to the poll, Brent crude prices would average $50.67 per barrel this year.

The Qatari Index closed flat as Qatar Fuel gained 1.2% and Commercial Bank shed 1.2%.

A Gulf Cooperation Council (GCC) summit will be held on Jan. 5 to discuss steps towards ending a diplomatic row with Qatar that began in 2017 when Saudi Arabia, the United Arab Emirates and Bahrain severed diplomatic ties with Qatar, accusing it of backing "terrorist" groups. Doha denies the charge and accuses its neighbours of seeking to curtail its sovereignty.

"I see some regional companies from Saudi, UAE and Qatar benefiting if these countries reach a settlement to the issues and remove the blockade," said Joice Mathew, senior research manager at United Securities.