The London-based weekly predicted that the all-share TEPIX index, which climbed to 13,612.2 points on December 22, was likely to continue to grow next year.

The TSE has been one of the region's best performers in recent years, with the index doubling in 2003. MEED suggested that the slowdown to 30 percent was bitter-sweet news for many investors, saying "instant profits were lower, but fears of a bubble have dissipated."

The financial sector was regarded as being the most instrumental in maintaining market stability at the TSE, after enjoying rapid growth from May to August and reaching a plateau in the autumn.

This compared with "far more volatile" industrial stocks, which have recorded large swings. But the weekly believed that the expected continued high oil price in coming months had boosted investor confidence with more public money available for projects.

In its outlook for 2005, MEED said that one of the most important changes will be the planned introduction of foreign investment in the TSE, probably through special offshore funds that are being proposed by private investment firms.

It also reported that the market itself was seeking to modernize trading platforms and establish branches in different cities, which was expected to crucially reduce the high-proportion of large state- affiliated institutional investors.

The weekly predicted that the hot sectors for next year will still be financial with newly privatised banks and insurance firms expected to do well. It also believed that although the housing boom had retreated, cement stock were likely to remain strong.

It further believed that other newly privatized businesses, particularly in the oil and gas or petroleum sectors, could be very popular in 2005.

... Payvand News - 12/30/04 ... --