Regional stock markets unstable, Egypt and Saudi slide as Dubai rockets
Dubai’s property and construction stocks surged on Sunday in the wake of the emirate’s spectacular mega city project launch as most share markets across the Middle East went on a retreat spearheaded by a tailspin in Egyptian shares in the first trading session since President Mohamed Mursi unleashed a political crisis by decreeing himself sweeping powers on Thursday.
Dubai Financial Market General Index surged 1.4 per cent to 1,619.30, recording the biggest intraday gains for the market gauge in eight weeks, propelled by Emaar Properties basking in the limelight after His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, announced plans for yet another iconic project — Mohammed bin Rashid City — which will contain 100 hotels and the world’s largest shopping mall. The DFM closed with a gain of 0.3 per cent at 1,601.84 points.
Shares of Emaar, which will build the new city alongside Dubai Holding, rose 4.1 per cent in early trading to close at 2.2 per cent up.
Other stocks also seen heading north on Sunday in early trading included Drake & Scull International, adding 1.6 per cent, Arabtec Holding, gaining 3.4 per cent, Deyaar Development, up 1.8 per cent, and Union Properties, rising 1.7 per cent.
Abu Dhabi market slipped 0.2 per cent to 2,636.53 points, with all but 13 stocks unchanged after an hour of trading. Dana Gas climbed 5.1 per cent, the most active stock on the index. The natural gas producer, in talks to restructure a $920 million Islamic bond, is offering bondholders cash and an average eight per cent coupon on two new sukuks to replace the existing one.
Wile other Gulf markets closed mixed, Cairo’s index EGX30 tumbled 9.6 per cent to 4,918 points as political turmoil in Egypt sparked by President Mursi’s new powers startled regional investors.
“Naturally investors have more reasons now to be nervous as Egypt’s political unrest could have widespread implications for the region’s markets, which are already jumpy over violence in Gaza,” said an analyst.
The Saudi main index dropped 2.1 per cent to its lowest close since January 25 and marked its biggest one-day loss since early June. Saudi’s heavyweight sectors — petrochemicals and banking — were the main drag. Saudi Basic Industries Corp, the world’s largest chemicals producer, fell 2.3 per cent. Al Rajhi Bank dropped 1.2 per cent and Samba Financial Group shed 2.2 per cent.
Elsewhere in the Gulf, Qatar index climbed 0.5 per cent to 8,448 points, while Kuwait’s markets retreated 0.2 per cent from Thursday’s five-week high as retail investors booked recent gain.
Fouad Darwish, head of brokerage at Global Investment House, said it was a seller’s market with retail investors in Kuwait making a quick buck. “They believe the momentum will continue.”
Qatar Navigation jumped 6.4 per cent after the company said it scraped plans for a 20 per cent capital increase. Doha’s benchmark QSI rose 0.5 per cent to its highest close since November 15.
Oman’s market index MSI slipped 0.2 per cent to 5,546 points and Bahrain index BAX gained 0.2 per cent to 1,041 points.