By TAREK EL-TABLAWY, AP Business Writer Tarek El-tablawy, Ap Business Writer – Tue Feb 22, 9:08 am ET
CAIRO – Egypt's stock exchange postponed its already long-delayed reopening until next week and markets in the Gulf Arab region posted their third consecutive day of declines as unrest in Libya and elsewhere in the region battered already fragile investor confidence in the Mideast.
Standard & Poor's, meanwhile, became the second credit agency in as many days to cut Libya's ratings, citing the kind of violence that has been unseen in Moammar Gadhafi's nearly 42-year leadership of that OPEC member state.
The Egyptian Exchange's decision to postpone its relaunch would mean that the market will have been closed for a month, assuming it restarts on Feb. 27. The exchange, in an e-mailed statement, said the decision followed consultations with the Egyptian Financial Services Supervisory Authority and brokerage houses. It did not specify a date for the relaunch.
The decision appeared to reflect that continued anxiety in Egypt about the country's economic woes following 18 days of protests that toppled Hosni Mubarak were being compounded by broader unrest in the region.
Unrest also has hit Yemen and Bahrain, putting the demonstrations on the other side of a causeway from Saudi Arabia.
The Dubai Financial Market's main index closed down 2.44 percent, to 1,479 points, while Saudi Arabia's TASI index rebounded from losses of over 1 percent earlier in the day. But the TASI still closed down 0.35 percent, or 6,277 points.
"You've got a political risk that is being leveled on local and regional equity markets. It's increasing day by day as we see more violence," particularly in Libya, said Haissam Arabi, chief executive of Gulfmena Alternative Investments, a fund management firm in Dubai.
"This is a situation where sentiment takes precedence over science and fundamentals," Arabi said.
In Dubai, Emaar Properties, the developer behind Burj Khalifa, the world's tallest building, closed down 2 percent, hitting 2.92 Emirati dirhams. Courier Aramex, meanwhile, saw its shares slide 7.36 percent to 1.51 dirhams.
Abu Dhabi's benchmark index closed down 1.57 percent, to 2,579 points, with the construction and real estate sectors recording the biggest declines.
Qatar's exchange was off 3.57 percent, bringing its year-to-date losses to more than 5.3 percent. The country, which is poised for a construction boom as it prepares to host the World Cup in 2022 and has some of the world's biggest natural gas reserves, has been one of the few in the region able to post staggering GDP growth figures, even during the global financial meltdown.
While Arabi said the region's markets are driven largely by retail investors, big institutional buyers overseas are also spooked by the continuing unrest.
"Foreign investors feel as though they really can't tell the difference" between countries in the Middle East and North Africa, he said. "The level of awareness, especially when it comes to politics, is really only what people see on CNN."
As long as the unrest keeps up, Arabi believes there could be further pressure to sell off stocks in the region.
The declines built on losses that have accrued since Sunday and come as ratings agencies take an increasingly critical look at the financial fundamentals of many of the countries in the region.
A day after Fitch cut Libya's ratings, S&P followed suit. The agency cut Libya's long-term sovereign credit rating to BBB+ from A-, placed all of its Libya ratings on credit watch negative and warned that additional cuts could be in the offing.
S&P said the cuts "reflect our reappraisal of political risks in Libya," and that it expects the violence to continue.
"In our view, the longer the unrest continues, the higher the risk of political instability spreading across the country," S&P said.
So far, credit agencies have cut ratings for several Arab nations, including Egypt, Jordan and Bahrain, citing the ongoing unrest and its potential impact on the countries' respective economies.
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AP Business Writers Adam Schreck in Dubai and Pan Pylas in London contributed.
View the original article here
CAIRO – Egypt's stock exchange postponed its already long-delayed reopening until next week and markets in the Gulf Arab region posted their third consecutive day of declines as unrest in Libya and elsewhere in the region battered already fragile investor confidence in the Mideast.
Standard & Poor's, meanwhile, became the second credit agency in as many days to cut Libya's ratings, citing the kind of violence that has been unseen in Moammar Gadhafi's nearly 42-year leadership of that OPEC member state.
The Egyptian Exchange's decision to postpone its relaunch would mean that the market will have been closed for a month, assuming it restarts on Feb. 27. The exchange, in an e-mailed statement, said the decision followed consultations with the Egyptian Financial Services Supervisory Authority and brokerage houses. It did not specify a date for the relaunch.
The decision appeared to reflect that continued anxiety in Egypt about the country's economic woes following 18 days of protests that toppled Hosni Mubarak were being compounded by broader unrest in the region.
Unrest also has hit Yemen and Bahrain, putting the demonstrations on the other side of a causeway from Saudi Arabia.
The Dubai Financial Market's main index closed down 2.44 percent, to 1,479 points, while Saudi Arabia's TASI index rebounded from losses of over 1 percent earlier in the day. But the TASI still closed down 0.35 percent, or 6,277 points.
"You've got a political risk that is being leveled on local and regional equity markets. It's increasing day by day as we see more violence," particularly in Libya, said Haissam Arabi, chief executive of Gulfmena Alternative Investments, a fund management firm in Dubai.
"This is a situation where sentiment takes precedence over science and fundamentals," Arabi said.
In Dubai, Emaar Properties, the developer behind Burj Khalifa, the world's tallest building, closed down 2 percent, hitting 2.92 Emirati dirhams. Courier Aramex, meanwhile, saw its shares slide 7.36 percent to 1.51 dirhams.
Abu Dhabi's benchmark index closed down 1.57 percent, to 2,579 points, with the construction and real estate sectors recording the biggest declines.
Qatar's exchange was off 3.57 percent, bringing its year-to-date losses to more than 5.3 percent. The country, which is poised for a construction boom as it prepares to host the World Cup in 2022 and has some of the world's biggest natural gas reserves, has been one of the few in the region able to post staggering GDP growth figures, even during the global financial meltdown.
While Arabi said the region's markets are driven largely by retail investors, big institutional buyers overseas are also spooked by the continuing unrest.
"Foreign investors feel as though they really can't tell the difference" between countries in the Middle East and North Africa, he said. "The level of awareness, especially when it comes to politics, is really only what people see on CNN."
As long as the unrest keeps up, Arabi believes there could be further pressure to sell off stocks in the region.
The declines built on losses that have accrued since Sunday and come as ratings agencies take an increasingly critical look at the financial fundamentals of many of the countries in the region.
A day after Fitch cut Libya's ratings, S&P followed suit. The agency cut Libya's long-term sovereign credit rating to BBB+ from A-, placed all of its Libya ratings on credit watch negative and warned that additional cuts could be in the offing.
S&P said the cuts "reflect our reappraisal of political risks in Libya," and that it expects the violence to continue.
"In our view, the longer the unrest continues, the higher the risk of political instability spreading across the country," S&P said.
So far, credit agencies have cut ratings for several Arab nations, including Egypt, Jordan and Bahrain, citing the ongoing unrest and its potential impact on the countries' respective economies.
___
AP Business Writers Adam Schreck in Dubai and Pan Pylas in London contributed.
View the original article here
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