23/02/2011 00:00 AST
Stock markets across the Middle East continued downward journey on Tuesday led by Qatar and Dubai as regional unrest further spurred ?panic selling.
Dubai’s benchmark index plunged to a six-month low and Qatar’s index saw its largest drop in nine months as foreign investors are dumping regional stocks and many local investors are trying to beat them to the punch, exacerbating declines, according to traders.
“The situation has deteriorated and it’s inevitable that investors should be concerned,” said Paul Cooper, Dubai-based managing director at Sarasin-Alpen & Partners Ltd, which oversees more than $500 million in the Middle East. “The derisking of portfolios would suggest markets will come down.”
Saudi Arabia’s TASI was down 0.8 per cent to 6,246 points, Dubai fell 2.44 per cent to 1,479.41 points and Abu Dhabi benchmark index dropped 1.57 per cent to 2,579.25 points. Qatar’s measure declined 3.6 per cent to 8,185 points, Kuwait index dipped 0.1 per cent to 6,418 points and Oman fell 1.5 per cent to 6,730 points. Bahrain rose 0.2 per cent to 1,468 points.
“As the populace throughout the region attempts to take on ever more tyrannical regimes, we will be faced with increasingly violent protest and consequently greater uncertainty,” said Julian Bruce, EFG-Hermes director of institutional equity sales. “This will manifest itself in higher oil prices and, paradoxically, weaker MENA equity markets.
“There is little to no chance of the region regaining the status quo (of) the beginning of the year, so for now, risk continues to outweigh opportunity.”
Dubai’s General Index fell 2.44 per cent to its lowest close since August 16. Logistics provider Aramex dropped 7.4 per cent. At Tuesday’s close, 35 per cent of its shares were held by foreigners, the second-highest total among primary listings on Dubai’s bourse.
“Foreign investors have sold huge amounts and support and resistance levels don’t matter right now,” said Hani Girgis, assistant chief dealer at Dlala brokerage in Doha.
Qatar fell 3.6 per cent, its biggest drop since May 25 and lowest close in 12 weeks, wiping out all gains from its World Cup bid rally. Qatari stocks had soared since it was chosen to host the 2022 soccer event in December.
Commercial Bank of Qatar fell 9.9 per cent as it went ex-dividend. CBQ was a favoured Doha pick for foreign funds because it has a global depository receipt listing in London.
“With oil prices holding up and positive catalysts like Qatar 2022 and Kuwait and Saudi’s expansionary budgets, 2011 was looking like a good year to be invested in the region, but political unrest has thrown a wrench into everyone’s forecasts,” said Akram Annous, MENA strategist at Al Mal Capital. “There (were) riots on the streets in almost half a dozen countries, not exactly what you look for when you want to sleep on an investment decision,” Annous said.
Khaleej Times
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