31/01/2011 00:00 AST
Stock markets in several Gulf countries, where many leading firms have interests in Egypt, dropped Sunday on mounting concerns over developments in the world’s most populous Arab nation.
The Dubai Financial Market shed over six percent of its value at the opening of trading week, with the DFM index dropping to 1,505.62 points.
The market remained down after 0800 GMT at 1,518.97 points, or 5.81 percent down.
The leading traded company, Emaar Properties, saw its share price plummeting by nearly 10 percent, the maximum allowed by the market regulations.
Emaar, which built the world’s tallest tower, Burj Khalifa, in Dubai, has various projects in Egypt.
Air Arabia also saw its share plunge by nearly 10 percent. The Middle East’s largest low-cost carrier has a hub in Egypt for its local joint venture Air Arabia Egypt.
Arabtec leading construction firm, which also has projects in Egypt, was also among the companies leading the plunge on DFM, with a 9.5 drop.
A mass revolt broke out across Egypt Tuesday, with more than 100 killed in riots and demonstrations over the past five days and much of the country in turmoil. “The drop in the Gulf bourses as a result of the events in Egypt is natural since there are huge Gulf investments in Egypt, especially in the industrial and banking sectors,” Kuwaiti economist Ali Al-Nimesh told AFP.
Investors in the Gulf Cooperation Council were affected by a negative sentiment, said Monica Malik, senior economist at the Cairo and Dubai-based EFG-Hermes investment bank.
“Although economic fundamentals and the political arena in the GCC are different from those in Egypt, markets are being led by a negative sentiment,” she told AFP.
In addition to Dubai’s, other Gulf stock markets were also down.
Neighboring Abu Dhabi Securities Exchange was down 3.74 percent.
Etisalat telecom company, which operates in Egypt through Etisalat Misr, was trading 3.35 percent down in early trading. Its value recovered a little during trading, but was still 2.87 percent down after 0800 GMT.
Kuwait Stock Exchange, the second-largest Arab stock market after Saudi Arabia’s, also dropped.
After trading 2.14 percent down in early exchange, KSE was 2.08 percent, or 144.4 points down, after 0800 GMT at 6,801 points. Qatar Exchange opened at 0700 GMT over five percent down. It slightly improved later in the day, but was still 4.15 percent down.
The Saudi stock market plunged 6.43 percentSaturday, its first day of trading. The market opens later in the day.
But Sunday, it recovered some of its losses, trading 1.6 percent up, less than one hour after opening 0800 GMT.
“Direct exposure to Egypt is an issue for some Saudi companies that have bought into Egyptian companies and established production facilities,” said Jadwa Investment in a report Saturday.
AFP
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