Most Gulf markets slip; Egypt falls on capital gain tax

Egyptian shares fell on Thursday after the cabinet announced a new capital gains tax, while most Gulf markets slipped as investors booked recent gains amid a weak global backdrop. Egypt's benchmark index dropped 2.7 percent, its biggest decline since April 18, after the new tax and an increase in income taxes were announced.
Osama Mourad of Arab Finance Brokerage said that while details on how the taxes will be applied are still unclear, equity investors are nearly certain to be affected. "It's obviously going to hurt them financially and hurt long-term investment in Egypt," he said. "All the big companies will make 5 percent less profit and, second, investors will pay double taxes."
"The only direction (for regional markets) is the global moves and the growth story is looking murky," said Matthew Wakeman, a managig director at EFG-Hermes Qatar's index fell 1 percent to an 11-week closing low, dropping for a second day after the bourse said it did not expect foreign ownership limits to rise in 2011 from 25 percent. Increasing the limit is seen as a key issue for the Gulf state's potential upgrade by influential index compiler MSCI.
Investors have begun to pull out speculative cash ahead of MSCI's June 21 review results on increasing doubts of inclusion. "The index may decline to touch 8,150, which will be a very good buying opportunity, and rebound sharply," said Omnia Ashawmy, head of technical analysis at Qatar Securities.
Dubai's index slipped 0.5 percent, easing from Wednesday's 10-day high. Most large-caps fell with Dubai Financial Market losing 1.6 percent. In Kuwait, the index dropped 0.8 percent to an eight-week low, weighed by banking stocks. National Bank of Kuwait, the country's largest stock by market value, fell 1.7 percent and telecoms operator Zain slipped 1.9 percent.
Other bank shares also slid, with Gulf Bank and Boubyan Bank down 1.8 and 1.7 percent respectively. Abu Dhabi's banking stocks lifted the index 0.3 percent to a three-week high, bucking the regional trend. Abu Dhabi Commercial Bank gained 0.3 percent after Fitch gave it an A+ rating and a stable outlook.
ADCB is a major shareholder in RHB Capital and the Malayian bank is the subject of take-over interest from two rival lenders in a move that would create one of the most valuable banking group in Southeast Asia. First Gulf Bank and National Bank of Abu Dhabi rose 0.3 and 0.5 percent respectively.