Dubai: Most stock markets in the Arabian Gulf region closed higher yesterday as concerns about Egypt eased a touch, after the much anticipated ‘day of departure' for the Egyptian president on Friday passed relatively peacefully.
Regional investors were more optimistic about the mostly peaceful stalemate over the weekend, after protests had turned violent Wednesday and Thursday.
Dubai's market ended 1.6 per cent higher yesterday; Abu Dhabi's benchmark index rose 1.1 per cent. Doha shares were up 1.5 per cent and Saudi's Tadawul market, the region's largest, ended 0.8 per cent higher.
Ongoing crisis
However, the ongoing crisis in Egypt leaves investors with doubts about a quick improvement of the sentiment at the major stock exchanges. Shaken by the violent uprising, investors cut deep into their holdings of emerging market equities last week, causing record net redemptions of $4.10 billion (Dh15.06 billion).
Egypt's stock market, which has been closed since January 27, is expected to reopen tomorrow and could have an impact on the prices of exchange-traded funds tied to the country. Some managers expect substantial gyrations in shares.
Cairo's financial markets, reopening from a steep sell-off, cannot look forward to much support from overseas portfolio managers who want more clarity on Egypt's economic and corporate outlook before venturing back to the country's newly-cheap securities, according to a Reuters survey.
Seven out of ten fund managers interviewed by Reuters said they will not buy Egyptian securities just yet despite steep falls that have brought stock valuations to among the most attractive levels in the emerging market asset class.
"You need to assess the danger to the overall economy [in Egypt], which has come to a standstill over the past two weeks," said Dilek Capanoglu, CIO of emerging equities at Allianz RCM in Frankfurt.
—With inputs from agencies