GCC investors' Eid pause for thought

The Eid Al Fitr holidays gave GCC investors a chance to pause for thought and mull the next move in the markets.

As usual events carried on regardless with Iraq's submission of an 12,000 page document to the United Nations a defining moment in world history. This document was reminiscent of the old stock market adage that revealing too much or too little can be just as effective in frustrating analysis.

So far the GCC investors response to the showdown between the US and Iraq over weapons inspectors has been to largely sit on the sidelines. Equally there has been no panic in the other direction.

For Gulf citizens know that the present tension is good for oil prices and that will support their economies nicely while the UN deploys an army of speed-readers to cope with Iraq's voluminous documentation. However, there is still a high probability that the US will find a casus belli amid current manoeuvres.

Following the pattern of the Gulf War in 1991 that would produce a sharp downward movement in GCC bourses, most analysts argue. Equally there is a consensus view that this will provide a buying opportunity as GCC stocks are undervalued by global standards and the business outlook is good.

Yet the consensus is often wrong, and what if the buying opportunity is actually now and not sometime in the future?

Usually when an investor can see an opportunity that is the time to do it and not wait. Stocks could move very sharply higher, quite quickly if Saddam Hussein quickly threw in the towel, leaving investors wishing they had acted earlier.