Middle East stock markets fell as investors booked profits following a pull-back in oil prices and international stock markets, but some Saudi real estate shares bucked the downtrend because of the kingdom’s economic reform plan.
Dar Al-Arkan Real Estate Development added 7.5% after a 20% jump last week.
It has been strong since the developer said last week that it was in talks with the government to provide housing under the reform policies, Reuters reported.
Emaar Economic City, another company which announced last week that it plans to build homes with the Ministry of Housing, advanced 1.7%.
The petrochemical sector was the main drag on Tadawul All-Share Index, which sank 0.6%. Saudi Basic Industries Corp. lost 1.2%.
Dubai’s index, the top performer in the region last week, lost 1% to 3,336 points, failing a test of technical resistance on the mid-May peak of 3,373 points.
Over nine-tenths of traded stocks declined, with Emaar Properties losing 2% and builder Arabtec down 2.1%.
“Investors have now fully played out the recent oil rally and will continue to book profits and stay clear of the stock markets until Q2 results,” said one Dubai-based portfolio manager.
“The common adage for stock investors is that they are driven by two factors: fear and greed, and now the former is taking precedence over the latter,” he added. The main fears, he said, were Britain’s June 23 referendum on whether to leave the European Union, and the risk of further weakness in oil prices.
Further, Abu Dhabi’s ADX General Index also fell for the second consecutive day by 0.3%, NBAD and Rakbank acting as the index’s anchor with a fall of 1.71% and 4.49% respectively. Union National Bank dropped 1.5%.
Reports added that the Qatar Stock Exchange had a weak opening with its key index falling below the 9,800 mark due to dragging telecom, industrials and banking stocks.
Oman’s MSM 30 Index and Saudi Arabia’s Tadawul All Share Index reportedly lost 0.3% and 0.6% respectively.
Egypt’s most heavily traded stock, Orascom Telecom Media, slumped 5.7%; sources told Reuters that Commercial International Bank had dropped plans to sell its investment bank CI Capital to Beltone Financial, a subsidiary of Orascom, after failing to win regulatory approval.
CIB dropped 2%. Billionaire Naguib Sawiris, whose family controls OTMT, said in March that the deal was being held up by national security concerns and criticized the state for meddling in business, saying this would discourage investors.
But investment firm EFG Hermes jumped 2% after saying it planned to distribute 1.08 billion Egyptian pounds ($121.6 million) to shareholders through a cash distribution or share buy-backs, after its sale of a 40% stake in Lebanese bank Credit Libanais. Cairo’s main index retreated 1.4%.
