JEDDAH/CAIRO: Egypt's benchmark tumbled Wednesday in the first day's trading since the fall of former president Hosni Mubarak, but Gulf markets were steady in light trade. Egypt's index plunged 8.9 percent percent to 5,143 points, taking its 2011 losses to 28 percent. Trading had been suspended since Jan. 27. Of 30 stocks on Cairo's top index, 23 fell by more than 9 percent. "Once Egypt's market stabilizes, foreign flows will come back strongly into regional markets, especially Oman, Qatar and Saudi Arabia because they offer the best valuations," said a Riyadh-based trader who requested anonymity. "Everyone was just selling," said Mostafa Abdel-Aziz, a senior broker at the Cairo-based Mideast investment bank Beltone Financial. "The foreigners were selling, the GCC institutions were selling. Local institutions were mostly silent." The reopening of the Egyptian Exchange – delayed several times – had been viewed with a mixture of trepidation and impatience. Analysts feared the prolonged closure would further unsettle already skittish investors. Some investors argued for its continued closure, arguing that the government needed to do more to offset their expected losses. "We're urging people to hold on to their shares and not be hasty. You might regret it" if you sell, Finance Minister Samir Radwan told reporters shortly after the session opening which he oversaw along with the exchange's new, temporary head. The reopening came a day ahead of a cut-off that would have left the Egyptian Exchange at risk of being de-listed from the MSCI Emerging Market Index, which is closely watched in relation to the more liquid developing world markets. Analysts had expected sharp losses as investors pulled their money from the exchange amid ongoing investigations of former regime officials and some of the country's top businessmen whose companies are listed on the exchange. "I was not surprised at all. It's something to be expected give the market was offline for seven weeks," said John Sfakianakis, chief economist at Banque Saudi-Fransi. "The situation in Egypt has not created confidence among international, and of course local, investors." Saudi Arabia's stock benchmark Tadawul All Share Index gained 0.28 percent at close Wednesday to a four-week high at 6, 362.42 as investors looked to the country's upbeat economy, with extra state spending announced last week well received by investors. The measure is down 3.9 percent this year. "We've made a V-shaped recovery from the market meltdown, but people have yet to price in increased petrochemicals prices," said the trader. Banks and petrochemicals are the two main sectors on Saudi's bourse, with the latter's prices closely tied to oil. Elsewhere, Dubai hit a month-high, but is in the red for 2011. Dubai measure gained 0.6 percent to 1,529 points. "It's very positive for UAE markets that they haven't reacted to Egypt," said Mohammed Yasin, CAPM Investment chief investment officer. State-owned conglomerate Dubai World signed a final agreement with its 80 creditors Wednesday to restructure debt worth $24.9 billion. "This confirms the deal is done – it was already priced into markets," said Yasin. "The investment community is not pricing in a delay in debt repayment from Dubai entities this year." Dubai's index was among the hardest hit as unrest in North Africa sparked protests in neighbors Oman and Bahrain. "That wasn't justified, so there's more room for UAE markets to rise – expectations are for companies to have a better year in 2011," said Yasin. Ports operator DP World fell 0.3 percent after hitting a five-week intraday high. Abu Dhabi's benchmark slipped 0.04 percent to 2,629 points. Qatar's index fell 0.5 percent to 8,295 points. Oman's index climbed 0.1 percent to 6,402 points. Bahrain's measure rose 0.6 percent to 1,419 points. Kuwait's index lost 0.6 percent to 6,295 points, still within 160 points of March 7's six-year low. "Kuwait will remain volatile – fundamentals are not there," said Badr Al Ghanim, Global Investment House vice-president of asset management. "If you look at valuations, the market doesn't look very attractive." Zain, which climbed 1.5 percent, is the only one of Kuwait's 20 largest stocks to rise. "We don't expect many surprises for Q1 earnings," said Al Ghanim. "Banks haven't done anything exceptional this year - lending growth wasn't there. We don't expect a drop in profits, but we also don't expect growth." Qatar's benchmark fell for third day as volumes hit a four-month low, with shares in bellwether Industries Qatar suspended for a board meeting. Foreign funds have returned to Qatar, having previously left amid regional unrest, but are now shorter-term investors, said Hani Girgis, assistant chief dealer at Dlala brokerage. "They can exit any time, which has a negative impact on our market," he said.
