Middle East markets were mixed on Thursday, as investors warily watched escalating violence in Egypt, while gloomy world stocks weighed on regional indices. Dubai's blue chips Emaar Properties and builder Arabtec, both with interests in Egypt, fell. Emaar slipped 0.9 percent and Arabtec dropped 1.2 percent. "With 13 percent of Emaar's book value linked to Egypt, we see some risk to the company," said Scott Darling, an analyst from Nomura in a reserch note.
"However, we see the company having sufficient balance sheet capacity to absorb any writedown." Supporters of President Hosni Mubarak opened fire on protesters in Cairo's Tahrir Square on Thursday, killing at least five, in a fresh spike in violence over an unprecedented challenge to his 30-year-old rule.
World stocks fell and oil surged above $103 a barrel on unrest in Egypt, adding to concerns about inflationary pressures, which could threaten the global economic recovery. "It's just clarity that the markets need at this point," said Saad al-Chalabi, a technical analyst for institutional equities at Al Ramz Securities in Abu Dhabi. "Its extremely difficult to predict what will happen. The uncertainty is even affecting companies that do not have much exposure to Egypt."
Egypt's stock market was shut again on Thursday. The country's central bank said that banks would reopen on Sunday after a weeklong closure. However, Egyptian protesters have called for another mass gathering on Firday. "The opening of the banks is crucial as it would mean that business is normal. But if Friday turns out to be another bad day then I don't think the banks can reopen," said Chalabi.
Abu Dhabi's First Gulf Bank ended on a one-week high, after it reported slightly higher fourth quarter profits, which beat analyst estimates. FGB gained 7.9 percent, rising to its highest value since January 26. The second-largest bank by market value in the United Arab Emirates attributed its profits to a rise in net interest income and its Islamic finance business.
"The results were just a reminder of the positive health of this bank," said Chalabi. "The fact the this bank has no exposure to Egypt may also have helped its rise in today. The gains were only correcting the mis-pricing that occurred due to the unrest in Egypt." Kuwait's telecom firm Zain ended lower, as the February 6 deadline nears for Kingdom Holding's proposed acquisition of Zain's Saudi assets.
Zain dropped 1.4 percent, weighing on the broader index which slipped 0.7 percent. Kingdom, Saudi Prince Talal bin Alwaleed's investment firm, said it is in financing talks with banks for the acquisition. Gulf Bank gained 1.9 percent after swinging to fourth-quarter and full-year profit.