Reuters/Dubai
An Orascom Telecom sign sits outside the company’s headquarters at the Nile City Towers in Cairo. Orascom weighed on the Egyptian benchmark yesterday, ending 3.5% lower
Regional bourses fell yesterday with the most marked decline on the Egyptian index where investors, already downbeat on the global economy, were spooked by tensions with Israel over the killing of five Egyptian security personnel during an Israeli operation.
Orascom Telecom weighed on the benchmark, ending 3.5% lower, as did investment bank EFG Hermes which retreated 6.8%.
“It’s a combination,” said CIBC trader Omar Darwish. “Given what is happening in the US, Egypt is following. And the Israel tension is panicking investors.”
Egypt and Israel sought yesterday to defuse a diplomatic crisis over the killings but crowds of Egyptians protested angrily at the Israeli embassy in Cairo.
Elsewhere, global recession fears led jittery investors across the region to dump stocks, taking their cue from a tumble in world equities on Friday and in Saudi shares which slumped to a 23-week low on Saturday.
Wall Street marked a fourth week of losses, and gold hit a fresh record high as investors rushed to the safe haven. Investors are now awaiting US’ Federal Reserve chairman Ben Bernanke’s speech on Friday for hints on how policymakers plan to address the weakness in the economy.
Property stocks led the decline in Dubai, with bellwether Emaar Properties falling 1.8% and builder Arabtec down 0.7%. The benchmark is off 4.2% on the month.
Abu Dhabi’s Dana Gas declined 1.8% after reports the energy firm picked banks to arrange its planned listing on the London Stocks Exchange.
“Concerns over economic indicators and fears of the economy going back into a recession—that kind of concern will have an effect on commodity prices, petrochems and our markets,” said Haissam Arabi, chief executive and fund manager at Gulfmena Investments. “What we’re seeing is natural.”
“We’re starting to shift from aggressive names to domestic names because fundamentals remain strong in the GCC. This might create opportunity for banks to pick up. They’re doing well and are cheap right now,” Arabi added.
Dubai’s index and Abu Dhabi’s market both fell 1.1%.
In Kuwait, Global Investment House plunged 10.4%, weighing on the index which slumped to a seven-year low; down 1.1% to 5,764 points.
“I personally think that Kuwait faces two challenges - the troubled investment companies and wages that devour the majority of the oil revenues,” said Safaa Zbib, head of research at Kuwait and Middle East Financial Investment Co.
Investment firms took a nose-dive earlier this year after the Capital Market Authority said investment funds are not allowed to invest more than 10% of total assets in a single security and investment firms require separate licences to operate their lending and investment businesses.
Muscat’s index declined 0.6%, easing from Thursday’s 10-day high.
Battered stock Renaissance Services ended flat after it gave back marginal early-session gains which were triggered after company officials said the company would meet its short-term commitments as it focuses on turning around Topaz, its troubled engineering unit.
Elsewhere, Saudi Arabia’s index eased 0.3% to 5,916 points and Bahrain’s measure declined 0.1 to 1,260 points.