Dubai, Kuwait buck shares slump in Gulf region

SHARES SLIDE: Only Kuwait, pictured, and Dubai ended the day up in the Gulf. (Getty Images)

Selling pressure from foreign investors continued to drag on Gulf bourses on Wednesday, with only Dubai and Kuwait bucking the negative trend.

Saudi Arabia's stock market closed lower for a third trading day, steered by Saudi Basic Industries Corp (SABIC).

The benchmark fell one percent to 8,504.72 points. SABIC declined 2.04 percent.

Saudi Arabia's index is one of three Gulf markets in bear territory. It has fallen more than 27 percent since Jan. 13, when it rose to an 18-month high.

Dubai's main index closed higher for the first time in four trading days as recent declines driven by foreign selling tempted local and regional investors to snap up bargains.

Abu Dhabi's main index ended slightly lower.

The Dubai benchmark edged 0.7 percent higher to 4,748.76 points. It has closed lower in all but one of the last 10 days.

“There is a lot of foreign selling so valuations have become attractive now,” says Sankar Kailasam, head of research at Gulf Investment Services. “There is some bottom-fishing happening among local and regional investors.”

Emaar Properties, which shed 5.4 percent in the last four days, gained 0.78 percent.

Abu Dhabi's main index shed 0.15 percent at 4,344.06 points, led lower by the banking sector after HSBC cut its price targets on a number of the emirate's major banks on fears they could be overly exposed to the Gulf's overheated real estate sector.

First Gulf, one of the banks HSBC says is the most exposed to any property downturn, fell 2.71 percent.

Qatar's main index closed lower for a second trading day and Bahrain shares also eased as foreign investors led selling across the Gulf. Kuwait shares edged higher.

The Doha benchmark, down 18 percent since reaching a 2-1/2-year high on June 11, lost 1.25 percent to 10,245.29 points. Qatar National Bank and Industries Qatar fell 2.14 percent and 1.4 percent respectively.

The Bahrain index, which is down 9 percent since hitting a record high on June 15, shed 0.4 percent to 2,637.52 points. Ahli United Bank declined 2.54 percent.

“Local, especially retail, investors are monitoring closely selling pressure from foreign investors,” said Samer al-Jaouni, general manager at Middle East Financial Brokerage.

Kuwait's index, the Gulf region's best performer this year, bucked the downtrend, gaining 0.39 percent at 14,083.00 points, after closing lower in the last seven trading days.

The index is down 10.1 percent since hitting a record high in late June.

Shares of Egyptian developer Talaat Moustafa surged more than 21 percent before Egypt's regulator suspended trading on the stock for surpassing its daily limit.

The shares, down nearly 50 percent this year to Tuesday's close, rose 21.27 percent.

They plunged 16 percent on Tuesday, the day Egypt's prosecutor charged the company's former chairman Hesham Talaat Moustafa in a murder case.

The company said on Tuesday Hesham's brother Tarek Talaat Moustafa had taken over as chairman.

“People are taking the opportunity after the sharp drop in the company's shares,” says Hashem Ghoneim, chief executive of El Nour Securities. “It's an asset-based company with land and buildings. What can go wrong if the chairman goes?”

Oman's stock market closed lower for the fifth time in six trading days, falling further into bear market territory as blue chips dropped on foreign selling.

The Muscat index, down more than 24 percent since hitting a record on June 12, lost 2.31 percent to 9,189.07 points, its lowest close in seven months. Bank Muscat fell 2.65 percent.

“Foreigners are booking profits to compensate for the losses they are making in other markets,” says Sankar Kailasam, head of research at Gulf Investment Services.

Emerging markets fell toward last month's two-year trough as oil prices dropped below $109 a barrel.

Lebanon's BLOM stock index fell 1.12 percent to 1,750.82 points, dragged down by heavyweight Solidere. The real estate firm's A share closes 1.85 percent lower at $27.58 and its B share fell 2.65 percent at $27.50.

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