January 30, 2011 / 2:20 PM / 8 years ago

Gulf markets tumble on Egypt turmoil

DUBAI (Reuters) - Gulf stock markets tumbled on Sunday as investors, rattled by turmoil in Egypt and concerns the unrest may spread, quit their positions to push indices to multi-week lows.

A protester holds up a poster of President Hosni Mubarak in downtown Cairo, January 30, 2011. REUTERS/Asmaa Waguih

Egyptian protesters were on the streets again in central Cairo, demanding President Hosni Mubarak step down while security forces struggled to contain looters.

Egypt's bourse .EGX30 was shut on Sunday after falling 16 percent in two days last week. The Egyptian pound has fallen to six-year lows.

Dubai led regional declines as its index .DFMGI fell 4.3 percent to a 21-week low, with companies exposed to Egypt among the biggest losers.

“Equity premiums in the region are rising to take into account increasing political risk,” said Majed Azzam, AlembicHC real estate analyst in Dubai.

“Uncertainty is making foreign investors question their presence in our markets and there is indiscriminate selling, whether companies are exposed to Egypt or not.”

Emaar Properties EMAR.DU, which has four major projects in Egypt including commercial and residential developments near Cairo, fell 8.3 percent. Azzam said about 10 percent of the Dubai developer’s assets were in Egypt.

“Emaar is in 18 countries and Egypt is one of the important markets for the company,” Emaar said in a statement, adding it was monitoring the situation closely.

Builder Arabtec ARTC.DU and contractor Drake & Scull DSI.DU, both active in the North African state, fell 6.7 and 8.3 percent, respectively.

UAE-based low cost carrier Air Arabia AIRA.DU, which flies to four destinations in Egypt and operates a hub in Alexandria, fell 6.1 percent. It was the most active stock on Dubai’s index, accounting for more than a quarter of all shares traded.

“Our flights are operating normally but we had to adjust the timings of flights to ensure it operates outside curfew hours,” said Adel Ali, the chief executive of Air Arabia. “Any long-term comments would be premature right now. We are watching the situation closely and at present our hub operations are normal.”

Qatar’s index .QSI fell 3 percent, but rebounded from an eight-week intraday low and like markets in Dubai, Abu Dhabi, Kuwait and Qatar, Doha’s bourse ended near its intraday peak, indicating some buyers returned following an initial sell off.

“Listed Qatar companies do not have much exposure to Egypt and if you think risk is from Egypt alone and unrest will not spread further, there is a good buying opportunity,” said Robert Pramberger, acting head of asset management at Doha-based investment firm The First Investor.

Oman .MSI fell 3 percent, Kuwait .KWSE dropped 1.8 percent and Abu Dhabi .ADI lost 3.7 percent.

“There’s an assumption from foreign investors that unrest could spread to other countries in the region and that is risk they don’t want to participate in,” said Robert McKinnon, ASAS Capital chief investment officer. “When everybody is scared, it is maybe a good time to take on risk, but there are so many permutations of what could happen politically in Egypt.”

Saudi Arabia’s index .TASI fell to a three-month low in initial trade, but subsequently rose to end 2.5 percent higher, rebounding following Saturday’s 6.4 percent drop, its largest in eight months.

ABU DHABI

* The benchmark .ADI dropped 3.7 percent 2,561 points.

DUBAI

* The measure .DFMGI fell 4.3 percent to 1,543 points.

SAUDI ARABIA

* The benchmark .TASI rose 2.5 percent to 6,422 points.

KUWAIT

* The index .KWSE dropped 1.8 percent to 6,822 points.

QATAR

* The index .QSI dropped 3 percent to 8,710 points.

OMAN

* The index .MSI fell 3 percent to 6,732 points.

BAHRAIN

* The measure .BAX dropped 1.4 percent to 1,452 points.

Additional Reporting by Praveen Menon, editing by Amran Abocar and Firouz Sedarat

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