Middle East markets: Egypt's bourse falls after austerity call; Gulf mixed

Egypt's bourse fell to a two-week low on foreign selling pressure on Monday, after the prime minister called for austerity measures to cope with an economic situation he said was "worse than anyone imagines" while Gulf markets ended mixed. Prime Minister Kamal al-Ganzouri, whose government was sworn in last week, said on Sunday he was looking at 20 billion Egyptian pounds ($3.3 billion) in spending cuts to rein in the burgeoning budget deficit.
"When foreigners hear these statements and compare it to the political scene and the absence of stability, they are afraid to take positions," said Fady Azeem el-Dawla of Naeem Brokerage. Cairo's main index fell 2.1 percent to its lowest closing since November 24. Blue-chips led losses, with investment bank Pioneers Holding falling 7.3 percent, and both Commercial International Bank (CIB) and Property developer Talaat Moustafa ending 4.7 percent lower.
In Oman, the index climbed 0.1 percent to a 12-week high with analysts saying valuations attracted buying. "Local funds started to buy at these levels and a lot of speculators are also trading now because our market has fallen a lot year-to-date" said Alaa El Din Moustafa, general manager at EFG-Hermes Oman.
The index is still down 16.7 percent in 2011. Galfar Engineering gained 2.6 percent, Oman Telecommunications rose 2.4 percent and Bank Muscat climbed 1.5 percent. In the UAE and Qatar, stock markets ended lower as doubts dampened sentiment on whether index compiler MSCI will upgrade the countries to emerging market status. MSCI is to announce its decision on December 14, having postponed this from June. An upgrade from frontier market status could help attract foreign investment. "Usually when a major event comes closer under uncertainty, people start speculating a few days before but the closer we get the more risk averse we become, unless a probability or information is leaked out," said Talal Touqan, head of equity research at Al Ramz Securities.
Dubai's index declined 0.6 percent, extending year-to-date losses to 14.9 percent. Emaar Properties shed 2.8 percent, Dubai Financial Market slipped 2 percent and Drake & Scull dipped 0.5 percent. "Participants are shunning most of the illiquid small names and consolidating their holdings into other open-to-foreign liquid stocks," Touqan said. In Qatar, the index slipped 0.1 percent as investors booked profits in banking stocks.
Qatar National Bank shed 0.3 percent, Masraf Al Rayan dipped 0.9 percent and Qatar Islamic Bank slipped 0.5 percent. In Kuwait, the index fell 0.3 percent with political uncertainty weighing on sentiment and Saudi Arabia's benchmark slipped for a second day, down 0.2 percent.