01/02/2011 00:00 AST
Gulf markets ended mixed yesterday; with Dubai and Saudi stocks among decliners as the unrest convulsing Egypt spurred renewed selling in volatile trade.
Protesters have intensified their efforts to force Egypt’s President Hosni Mubarak to quit as world leaders struggled to solve a crisis that has torn up the Middle East political map.
“Egypt is at the centre of everybody’s radar and the market is trying to find a level that makes sense for what is happening in Egypt and the ramifications for the region,” said Tarik Lotfy, Arqaam Capital Head of MENA equities in Dubai.
Egypt’s bourse will be closed for a fifth day today, but Middle East markets have tumbled on Sunday, with Saudi Arabia, Dubai, Abu Dhabi, Oman and Qatar all making their largest daily declines in at least eight months. Although some stocks have since trimmed losses, more volatility is forecast.
Yesterday, trading volumes were lower than a day earlier, but remained above the January average.
Dubai’s measure fell 0.6% to 1,534 points. Saudi Arabia’s benchmark dropped 1% to 6,358 points.
Abu Dhabi’s benchmark rose 1% 2,587 points. Kuwait’s index rose 0.6% to 6,859 points. Oman’s index climbed 1.6% to 6,839 points. Bahrain’s measure dropped 0.2% to 1,449 points.
In Dubai, Emaar Properties dropped 1.9%. The UAE’s largest developer has nearly a fifth of its land bank in Egypt, according to estimates. Contractor Drake & Scull fell 1.5% and builder Arabtec slid 1.2%. Both are active in Egypt.
Dubai’s index fell to a 21-week low, taking its losses to 4.9% in two sessions.
“When you get a down day like yesterday, invariably some people will come in for some bottom fishing, which is what happened at the open, but most investors are cautious, so there wasn’t much follow through,” added Arqaam’s Lotfy.
Saudi Arabia’s bourse, the largest in the Arab world, gave back early gains, taking its losses to 5.1% this week as firm oil prices did little to bolster sentiment in the world’s top crude exporter.
“Markets don’t like uncertainty and therefore I don’t see long-term money coming back despite compelling valuations,” said Shakeel Sarwar, head of asset management at Securities & Investment Co (Sico) in Bahrain.
Benchmarks in Abu Dhabi and Oman rose 1 and 1.6% respectively, but confidence remained fragile.
“If things turn nasty (in Egypt) then foreigners will accelerate their selling in the region,” said Adel Nasr, United Securities brokerage manager in Muscat.
Kuwait’s index climbed 0.6%, clawing back some of Sunday’s 1.8% drop.
Government funds have been buyers on Kuwait’s market this week, Nafisi added, helping to limit losses.
Zain rose 2.8% after Kingdom Holding bid for the Kuwait operator’s Saudi assets, paving the way for Abu Dhabi’s Etisalat to complete a takeover of Zain.
Reuters
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