Egypt index falls on renewed violence; most Gulf markets down
Egypt’s benchmark index tumbled to a six-week low Sunday after renewed street violence in Cairo and in other cities, and Kuwait fell after protesters stormed its parliament. The clashes represent one of the biggest security challenges yet for the ruling generals, a little more than a week before a parliamentary election. The index fell 2.5 percent to its lowest finish since Oct. 11.
“The market is acting cautiously,” said Osama Mourad of Arab Finance Brokerage. “It was falling dramatically in the first minutes of trading and then recovered slowly because of the mixed messages we are receiving from the media. Investors are worried about the implications for elections.”
Cairo youths chanting “The people want to topple the regime” rushed at police, who fired rubber bullets and tear gas. Protesters clashed with police in at least two other cities. Two people were killed and hundreds wounded. Egypt will hold a parliamentary election in a staggered vote that starts on Nov. 28, the first such vote since President Hosni Mubarak was forced from office. Orascom Construction Industries, the country’s biggest listed developer, fell 3.3 percent and Commercial International Bank dropped 3.1 percent.
In Kuwait, the benchmark also ended lower, dropping 0.6 percent to its lowest close since Oct. 5 as domestic political unrest weighed on sentiment. Kuwait’s emir ordered security forces on Thursday to “take all measures” to maintain public order after protesters stormed parliament demanding the resignation of the prime minister over alleged corruption. Logistics provider Agility fell 5.1 percent and National Real Estate Co plunged 6.8 percent.
“Agility and related companies had a fantastic run based on a variety of unsubstantiated rumors, but Kuwait is now seeing more serious protests than it had previously, which has given investors an excuse to start selling off these names,” said Julian Bruce, EFG-Hermes director of institutional equity sales. “This is spreading to the rest of the Kuwait market, even into the National Bank of Kuwait.” NBK fell 3.5 percent.
In Dubai, Emaar Properties fell 2.6 percent, the main drag on the index, which made its largest decline in three weeks. In Abu Dhabi, the index slumped to a four-week low and Qatar also ended lower as some investors cut their exposure to regional equities. “Investors are cautious over the external backdrop, particularly the eurozone situation,” said EFG’s Bruce.
“UAE turnover was a little bit better, which indicates there are some buyers accumulating in select names, but these are exercising caution and are predominantly local rather than Western institutions.” World stocks fell Friday as investors continue to fear a spread of the eurozone crisis into core European economies.
- 'Interesting potentional': why, despite all, global investors can't keep their eyes off MENA stocks
- Need some space? UAE's banking sector is getting too crowded
- Bank funding in the Middle East doesn't boil down to liquidity alone
- Why is the Israeli shekel so weak?
- What doesn't kill you, makes your stronger: why the Arab Bank is likely to emerge from the Israeli lawsuit 'unscathed with flying colors'