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Global stocks decline worries Gulf investors
May 17, 2011 10:16 by Reuters
Gulf Arab markets may see a third day of weakness on Tuesday after global stocks failed to make a recovery.
Japanese stocks slipped on Tuesday amid signs of a slowdown in the U.S. economic recovery that pushed global stocks and oil prices lower a day earlier but there were few fresh factors to have a bearing.
“The international backdrop is worrisome. There’s enough news internationally that’s causing (Gulf) investors to be jittery,” says Tarek Lotfy, Arqaam Capital’s head of MENA equities.
“Any weakness is on low volumes, which is primarily driven by concerns internationally.”
Dubai’s bourse fell to a five-week low on Monday after Dubai’s government took control of troubled Islamic lender Dubai Bank to stave off a potential collapse that would undermine the emirate’s banking sector.
“Yesterday’s sell-off was a bit aggressive,” Lotfy says.
UAE telecom operator Etisalat may be in focus after it said will spend up to 3 billion dirhams ($817 million) annually for the next five years on UAE infrastructure.
The telecom regulatory authority said Monday it will cut royalty charges or taxes for telecoms firm Etisalat that would provide an instant boost to sagging profits at the former monopoly.
Elsewhere, Egypt property stocks rose on Monday, while Oman slumped to a 10-month low with investors saying first-quarter earnings are still weighing sentiment.
Oman’s central bank approved the first Islamic bank in the country, Bank Nizwa, which is seen as a diversification of the country’s financial sector but analysts are concerned about regulations.