By Agency Reporter

Wednesday, 2 Feb 2011

DUBAI: Stock markets in several Gulf countries, where many leading firms have interests in Egypt, dropped on Monday on mounting concerns over developments in the world’s most populous Arab nation.

Agence France Presse reported on Tuesday that the Dubai Financial Market shed over six per cent of its value at the opening of trading week, with the DFM index dropping to 1,505.62 points.

It closed 4.32 per cent down at 1,543.02 points.

The leading traded company, Emaar Properties, saw its share price plummeting by nearly 10 per cent, the maximum allowed by the market regulations. It closed 8.26 per cent down.

Emaar, which built the world’s tallest tower, Burj Khalifa, in Dubai, has various projects in Egypt.

Air Arabia also saw its share plunge by nearly 10 per cent in early trading, and closed 6.09 per cent down. The Middle East’s largest low-cost carrier has a hub in Egypt for its local joint venture Air Arabia Egypt.

Arabtec leading construction firm, which also has projects in Egypt, was also among the companies leading the plunge on DFM, with a 9.5 drop in early trading. It closed 6.74 per cent down.

A mass revolt broke out across Egypt on Tuesday against the decades-long autocratic rule of President Hosni Mubarak, with more than 100 killed in riots and demonstrations over the past five days and much of the country in turmoil.

Cairo’s stock market remained closed Sunday after it had plummeted 10 per cent before trading was suspended on Thursday.

“The drop in the Gulf bourses as a result of the events in Egypt is natural since there are huge Gulf investments in Egypt, especially in the industrial and banking sectors,” Kuwaiti economist Mr. Ali Al-Nimesh told AFP.

Investors in the Gulf Cooperation Council were affected by a negative sentiment, said Ms. Monica Malik, senior economist at the Cairo and Dubai-based EFG-Hermes investment bank.

“Although economic fundamentals and the political arena in the GCC are different from those in Egypt, markets are being led by a negative sentiment,” she told AFP.

In addition to Dubai’s, other Gulf stock markets were also down.

Neighbouring Abu Dhabi Securities Exchange was down 3.74 per cent during trading hours, before closing 3.68 per cent down.

Etisalat telecom company, which operates in Egypt through Etisalat Misr, was trading 3.35 per cent down in early trading. Its value recovered a little during trading and closed 2.87 per cent down.

Source: Punch