Gulf slip, Egypt up on China deal

Dubai

Most stock markets in the Gulf fell yesterday after a rebound in the Brent oil price proved short-lived and foreign fund inflows into Saudi Arabia remained tiny following the market's opening to international institutions this week.

The main Saudi index slipped 0.2 per cent as heavyweights Saudi Basic Industries and National Commercial Bank lost 0.4 and 0.8pc respectively.

Most other components of the provisional MSCI Saudi Arabia index also fell, having rallied in previous weeks in anticipation of increased demand when the market opened to direct foreign investment on June 15.

Modest trading volumes on Monday and Tuesday indicated there were no large fund inflows from abroad. Only one foreign institution, HSBC, has so far said it has obtained a licence to invest, though stock exchange chief executive Adel al-Ghamdi told Reuters that regulators were processing six applications.

Saudi stock exchange data released on Tuesday showed that qualified foreign institutions had invested very small amounts - no more than 0.02pc of each company - on Monday in a handful of stocks, including petrochemical firms Sipchem and PetroRabigh, healthcare companies Dallah and Mouwasat and medical insurer Bupa Arabia .

UAE, EGYPT

Dubai's index was the day's biggest loser, closing 0.9pc lower as trading on the bourse focused on the shares of Amlak Finance, which is not part of the benchmark.

Bourses in Abu Dhabi and Qatar slipped 0.1 and 0.3pc on low volumes.

Egypt's index, on the other hand, rose 0.5pc as most stocks closed higher. The Cairo government has entered into an initial agreement with China over 15 investment projects worth about $10 billion, Egyptian trade minister Mounir Fakhry Abdel Nour said late on Monday.

The projects would mainly focus on the electricity and transport sectors but would also include Chinese direct investment in other areas, he said.

Qatar index edged down 0.3pc to 11,874 points, Kuwait slipped 0.3pc to 6,259 points, while Oman ended flat at 6,494 points. Bahrain remain unchanged at 1,365 points.