Egypt's index posted its biggest fall in nearly eight months, as foreign investors sold shares on concerns that the political unrest that unseated Tunisia's leader could spread to other Arab states. A second Egyptian man set himself on fire near parliament on Tuesday, security sources said, in the latest case echoing an act of self-immolation in Tunisia that spurred protests and helped bring down the president.
The 30-firm Cairo index declined 3.1 percent, its biggest fall since May 25, with all but one stock, EFG Hermes, losing. "Foreigners are net sellers in the market," said Mohamed Radwan of Pharos Securities. "Escalating events in the region are just making some foreign investors bearish about the region from a macro perspective, especially the political risk."
Credit Suisse on Monday downgraded its rating on Egyptian equities from overweight to neutral on the prospect of rising domestic inflation and political uncertainty. "Tunisia's events, followed by the man who set himself on fire in Egypt yesterday, gave a bad picture of the region's markets to foreign investors, who quickly reacted with heavy selling," said Amr el-Feky of Cairo Capital Securities.
Elsewhere, heavyweight Saudi Basic Industries saw its biggest drop since November 23, weighing on the index. SABIC fell 1.3 percent and the index lost 0.8 percent. After markets closed, SABIC reported a 27-percent rise in fourth-quarter net profit, meeting forecasts, on higher prices of petrochemical and plastics products.
Saudi banks also registered losses, led by Samba Financial Group, which fell 1.2 percent. Abu Dhabi's Aldar Properties rebounded after hitting a five-month low on Monday to rise 3.5 percent. The developer confirmed guidance that it expects to post a profit in 2011. Property stocks in Dubai also climbed, led by Deyaar which gained 1 percent and Drake and Scull, up 2.9 percent.
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