CAUTIOUS: Gulf investors careful ahead of EU summit
Gulf investors are taking cues from Europe amid thin local news and negative sentiment may spill over to regional markets as hopes fade of a debt-crisis resolution from an EU summit later this week.
June 26, 2012 10:39 by Reuters
“People were expecting the EU summit to come up with a resolution and further integrate the EU economies, but comments from the German chancellor showed resilience to sharing debt with the rest of the EU and perception now is that the summit will not be as fruitful as expected,” says Marwan Shurrab, vice-president and chief trader at Gulfmena Investments.
German Chancellor Angela Merkel, who leads Europe’s biggest economy and the main contributor to its rescue funds, said sharing debt liability within the 17-nation euro area would be “economically wrong and counterproductive”.
Asian shares were caught in choppy trade on Tuesday as investors remained cautious ahead of a European leaders summit.
Brent crude was at $90.86 a barrel by 0434 GMT, down 15 cents.
The two-day summit in Brussels will be the 20th time EU leaders have met to try to resolve a crisis that has spread across Europe since it began in Greece in early 2010. Appetite for riskier assets is expected to stay low as investors remain cautious ahead of the meet later this week.
“I wouldn’t expect a negative move today (in local markets) but a shift towards defensive securities,” Shurrab says.
Sentiment in Qatar may be dampened after the state planning authority said it expects the country’s economic growth will slow to 4.5 percent in 2013, the weakest rate in a decade.