DUBAI: Most Middle East markets rose on Tuesday as a positive opening on European bourses eased investors’ fears following sharp declines in world stocks a day earlier.
Egypt’s main index climbed 0.3 percent to 4,729 points.
Dubai’s Emirates NBD rose 1.4 percent, helping the index end higher for a first session in three, but gains were minor and UAE markets were likely to remain in the doldrums due to a lack of local catalysts to shift investors’ focus away from the turmoil on global bourses.
"The main theme is the very low levels of activity, which will continue until we get a clearer picture elsewhere and maybe some positive news about the UAE," said Julian Bruce, EFG-Hermes director of institutional equity sales.
"There is some select buying, but no one is in any real hurry, with no big clips of money going to work — the whole market is on the back burner."
Kuwait also rose, climbing 0.1 percent, even though none of the six largest shares made gains, with trading concentrated in small cap stocks. These are the preserve of retail investors, indicating funds were largely absent.
"We think third-quarter profits will be lower than Q2 and don’t foresee any boom in the market in the near future," said Naser Al-Nafisi from Al Joman Center for Economic Consultancy.
Many Kuwait firms rely mainly on income from market trading and some may be forced to delist for failing to meet tougher new rules, said a Kuwait trader who asked not to be named.
"This is worrying some investors," he added.
In July, Kuwait’s newly formed regulator Capital Markets Authority gave investment funds until March 2012 to impose a cap on their ownership in individual securities.
Some funds hold up to 30 percent of their assets in big names like National Bank of Kuwait (NBK) or telecoms firm Zain and low bourse turnover makes it tough for them to cut their exposure to these stocks, Nafisis said.
Average daily trading volumes have fallen by about half in 2011 compared to a year earlier, according to Reuters data.
NBK fell 1.9 percent after Goldman Sachs cuts its price tag for Kuwait’s top lender to 1.39 dinars from 1.53 dinars, and said delays in implementing development projects in Kuwait could lead to low loan growth for NBK.
In Doha, Qatar Electricity and Water added 1.5 percent and Qatar Telecom (Qtel) rose 0.1 percent.
"Companies least exposed to global growth such as utilities and telecoms should fare better," said Robert Pramberger, acting head of asset management at Doha-based The First Investor.
"Qatar’s economic growth is based on gas exports and a global slowdown wouldn’t really impact it at a GDP level."
Qatar’s economy is forecast to grow 16.7 percent in 2011, according to a June Reuters poll.
Oman’s index made its largest decline in four weeks.
Bank Muscat fell 2.1 percent, Renaissance Services lost 3.4 percent, while telecom firms Omantel and Nawras dipped 1 and 0.9 percent respectively.
"We used to have strong buying from institutions, but are now following global sentiment, which is very bad — that’s what is driving us down," said Adel Nasr from United Securities.
"Banking and services are hardest hit because foreign investors concentrate on Bank Muscat, Renaissance, Omantel and Nawras so selling pressure is coming to these stocks." –Additional reporting by Maha El Dahan
