Qatar's stock market will take its cue from a stream of quarterly reports this week that could shape investor views on the country's banking sector.
"Investors are expecting good earnings from the banks that haven't reported," said Joe Kawkabani, the chief investment officer for equities at Franklin Templeton Investments. "From the ones that have, loan volumes have been impressive, and non-performing loans have declined after the government raised wages and announced infrastructure projects for the 2022 football World Cup," he said.
Qatar, the biggest exporter of liquefied natural gas, expects economic growth of about 16 per cent and projects a budget surplus of 6.1 billion rials this year. The IMF forecasts growth of about 19 per cent this year, making Qatar's the world's fastest-growing economy for a second year.
"We like Qatar's market and are overweight across all the Mena [Middle East and North Africa] funds at Templeton," Mr Kawkabani said.
Commercial Bank of Qatar and Al Khaliji Bank are scheduled to report their quarterly earnings tomorrow.
Ahli Bank of Qatar is expected to publish its financial results on Tuesday. Qatar Islamic Bank is to report on Thursday.
Last week, heavyweight Qatar National Bank reported a 31 per cent increase in third-quarter profit to 1.9bn rials, beating analysts' estimates of 1.8bn rials.
The stock has risen for five consecutive sessions and is up 7.4 per cent this year to 142 rials, outperforming the QE Index, which is down 3 per cent to 8,396.53. Doha Bank, the country's fifth-largest lender by market value, reported a 10 per cent increase to 308 million rials on Thursday.
In Saudi Arabia, markets are waiting for third-quarter results from the world's largest petrochemicals producer in the coming days or weeks, to provide an indication on resilience in the sector amid lower oil prices since the past quarter and fears of a global economic slowdown.
Saudi Basic Industries (Sabic) is expected to post a 48.9 per cent increase to 7.9bn riyals.
Oil prices rocketed from about US$90 a barrel for Brent crude at the start of the year to just short of $130 in May before retreating to about $113 today. Sabic's stock is down 12.9 per cent for the year to 91.25 riyals.
Last week, Yanbu National Petrochemicals, a Sabic subsidiary, reported a profit of 827.9m riyals in the third quarter compared with a profit 356.2m riyals in the same period a year earlier.
The lenders Riyad Bank and Al Jazirahave yet to report quarterly earnings.
Haissam Arabi, the chief executive at Gulfmena Investments in Dubai, said he expected a good performance from the Saudi banking sector, with numbers indicating a healthy bottom line as the country's economic growth accelerates, spurred by a $130bn spending plan announced by King Abdullah.
Last week, Al Rajhi Bank led others in posting higher third-quarter profit. Net income was 1.94bn riyals, 18 per cent more than in the same period last year. Saudi British Bank reported a 50 per cent jump in profit to 630m riyals, and Saudi Hollandi posted a quarterly profit of 299.4m riyals, compared with 85.3m riyals in the same period a year earlier.
In the UAE, markets are likely to trade flat until companies start reporting earnings.
"The UAE is the only Gulf market that tends to be late in releasing numbers," Mr Arabi said. "All eyes are going to be on the banking sector, real estate with a particular focus on Emaar Properties."
From the results released so far, regional markets have reaffirmed their fundamentals and distinguished themselves from emerging markets.
"The valuations of regional companies are similar to China and India right now, trading at 14 times earnings," Mr Arabi said. "Yet while their earnings are declining, ours have shown an average 20 per cent growth rate this quarter."