Gulf markets slump on weak oil, global equities; Egypt bourse nosedives

Several major stock markets in the Middle East dropped over 2% on yesterday as protracted weakness in oil prices and the gloom in equity markets globally prompted investors to dump shares.
Egypt’s main index tumbled 4.1% in its biggest drop since January 20, bringing its losses this year to 17.0%.
Commercial International Bank Egypt slumped 7.1% to 31.25 Egyptian pounds. Egypt’s largest listed lender by market value posted fourth-quarter net profit of 1.15bn pounds ($147mn), up 11%, but cut its planned dividend payment, saying it wanted to boost its capital adequacy ratio.
“The strong performance at the top line was partially offset by higher operating expenses and provisioning,” said a note by Cairo-based Naeem brokerage, though it upgraded the stock to “buy” from “accumulate” with a target of 51.28 pounds. The stock is now down 16.1% year-to-date.
Orascom Telecom tumbled 5.3%. The conglomerate’s board has approved its final offer for the acquisition of CI Capital, a subsidiary of CIB, the company said yesterday.
But Beltone Financial, taken over by Orascom late last year, surged 10% for a second straight day. Investors think Beltone will benefit strategically under new ownership.
Saudi Arabia’s index dropped 3.0% to 5,661 points after breaking technical support at the early February low of 5,834 points.
The petrochemical sector was one of the main drags with Saudi Basic Industries, the largest listed stock by market value, fell 3.8%. Saudi Kayan Petrochemicals tumbled 6.1%.
Local investors also dumped small and mid-tier stocks. Emaar Economic City and Al Tayyar Travel Group each dropped more than 7.0%.
Dubai’s index dropped 2.6% to 2,981 points, weighed down by the real estate sector, taking its losses to 5.4% in 2016.
“Most traders booked profits and opted to shift to the stable and less volatile stocks or holding cash for the time being until it tests the next major support,” said Shiv Prakash, senior analyst at Abu Dhabi’s NBAD Securities. The next supports are at 2,945 and 2,866 points, he added.
DAMAC Properties sank 4.2% to 2.49 dirham in volatile trade. Over the past week shares in the developer had enjoyed a technical rebound, but investors cashed out on Thursday after the company reported a 12% fall in fourth-quarter net profit.
“Technically 2.67 dirhams was the neckline resistance from where the profit-taking started - the lower support is now seen at 2.35 dirhams,” said Prakash.
Another developer, Emaar Properties, dropped 2.7% after briefly trading in positive territory. The company reported near-flat quarterly net profit of 1.03bn dirhams ($281mn) after taking a writedown related to a fire at one of its hotels on New Year’s Eve. An analyst at SICO Bahrain had forecast 1.08bn dirhams.
Dubai Parks and Resorts tumbled 3.5% after the amusement park builder posted a 2015 loss of 109mn dirhams compared to a 21mn dirham loss a year earlier.
Abu Dhabi’s index declined 0.8%, erasing most of the previous session’s 1.0% gain. Dana Gas, a natural gas explorer, fell 2.0% and was the most traded stock.
RAK Properties dropped 3.6% as traders turned a quick profit; the shares had surged their 15% daily limit in the previous session after the developer reported 2015 profit rose to 160mn dirhams from 156mn dirhams in 2014.
“The resilience of the United Arab Emirates market over the past couple of weeks was partly attributed to the quarterly earnings,” said Sebastien Henin, head of asset management at Dubai-based The National Investor.
Elsewhere in the Gulf, Kuwait’s index fell 0.3% to 5,132 points; Oman’s index edged down 0.7% to 5,358 points, while Bahrain’s index slid 0.2% to 1,166 points.