Regional markets to close February in the green as KSA struggles to catch up

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Regional markets are showing resiliency for the first time in a long time as they ride out another volatile week and preserve monthly gains. With 2 trading days to go in the month, it looks like most markets will close out the month in the green with Saudi looking like the only one struggling to post a monthly gain, according to research released by Al Masah Capital, a leading alternative asset management and advisory firm in Dubai.

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“Despite repeated attempts by sellers to increase pressure, buyers held their ground, allowing regional markets to gain on average 0.7% on the week. A positive average monthly gain has not happened since last April and given the carnage in January, it will be seen as a small victory,” the report noted.

February gains have been led by retailers, which tends to be the case in these markets and the buying has focused on smaller cap names which is what retailers focus on; hence market pessimists will deem this a weak foundation on which to build any momentum unless institutions and foreign money recommit significantly. However, with oil still volatile and a bottom far from in place, uncertainty still has the upper hand hindering fresh inflows. In the coming week the transition from February to March will be done with an eye on whether buyers can maintain the recent uplift.

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