DUBAI Dec 22 Gulf stock markets look set to
consolidate in quiet trade on Thursday ahead of the announcement
of Saudi Arabia's 2017 state budget in the afternoon.
An official news conference on the budget is expected to
start at 1400 Saudi time (1100 GMT), although official
statements could begin coming out before then.
Sources familiar with budget planning told Reuters the
government would reveal substantial progress in cutting the
budget deficit from a record high in 2015, and that state
spending would be raised in 2017 to support economic growth.
This would be positive for the stock market, but many
investors may wait to buy stocks until they see details of
austerity policies in the budget. Domestic energy prices are
expected to be increased to ease the government's subsidy
burden, but it is not clear whether this will merely affect
domestic fuel prices or also prices of natural gas feedstock,
which would be negative for petrochemical producers.
Low trading volumes in most Gulf markets in recent days
suggest some investors are already on the sidelines for the New
Year holiday period.
The global market environment is neutral to slightly
negative, with MSCI's broadest index of Asia-Pacific shares
outside Japan down 0.5 percent and oil prices
having slipped moderately overnight.
(Reporting by Andrew Torchia)