Investment trend likely points to oil as commodity inches towards $50
The second week of May saw buyers bravely step back into the markets after the selling in the first week. In an effort to preserve the momentum built up by the last 3 months, buyers took opportunity to go after better entry points, according to Al Masah Capital’s weekly investment report.
In general, it was cautious buying aimed at stalling any selling momentum which goes to explain why the average regional gain was only 0.5%. Saudi, emboldened by oil’s strengthened position in the mid-$40 range, went up 1.6% as the best weekly performer followed by Dubai 1.1%, where eager buyers stepped back in and Egypt 1.0% where again the buyers attempted to wrest back control.
“Investors looking for a trend for the coming week will most likely look towards oil. With the price of crude inching towards $50, it can only benefit the buyers at least in the first half of the week. If the momentum is maintained and the week ends in the green, then the May monthly losses would have been cut even more and the buyers would be seen to be regaining the initiative. On the other hand, there is fair amount of caution especially in the global economy with China again not sending the right signals and Europe barely ticking over meaning any regional bullishness will be subdued at best,” the report noted.