DUBAI: Most Gulf bourses resumed declines Monday as the U.S. Congress prepared to debate on whether or not to approve a military strike on Syria, while Egypt rose after a full acquisition offer for Orascom Construction. Dubai’s benchmark dropped some 2 percent to 2,325 points, giving back Sunday’s gains to slump to a two-month low.
“This volatility shows the market didn’t bottom out and the technical outlook is still negative,” said Firas al-Zghaibi, financial markets strategist at brokerage MENA Corp.
“Most likely, the index will break below 2,300. A typical target is 2,220 but because of news-flow, volatility may rise so we might see lower levels.”
Abu Dhabi’s index fell 1.4 percent, down for a fifth session and to slump to its lowest close since May 27.
In Qatar, the share measure retreated 1.2 percent, taking its losses to 9.5 percent since Aug. 22.
“Heavy speculative trading is taking place – investors are trying quick hit and run transactions and cashing out before the end of the day rather than holding on to shares as the attack on Syria could come at any time,” said Yassir Mckee, wealth manager at Al-Rayan Financial Brokerage.
“Qatar [market] losses will continue at relevant and parallel speed to American talks about military intervention in Syria.”
Elsewhere, Saudi Arabia’s measure climbed 0.1 percent, up for a second session since Thursday’s two-month low but gains were capped as geopolitical risk weighed on sentiment.
In Egypt, the bourse bucked a regional downtrend as Orascom Construction’s Dutch-listed affiliate announced a full acquisition offer, lifting investor interest. Shares in OCI climbed 1.7 percent to 255 Egyptian pounds, matching the offer, at 255 pounds per share in cash or one share of Amsterdam-listed OCI NV. Tender periods will run from Oct. 22-28 and Jan. 19-23.
In a previous offer, OCI NV bought over 97 percent of the Cairo-listed firm. A successful buyout would mark the delisting of what was once the Cairo market’s biggest blue chip, but OCI has already been taken out of the benchmark 30-stock index .
Some investors are willing to bid OCI’s market price above the tender price because they want to get their hands on OCI NV shares, which are now above 30 euros compared to around 20 in early July. OCI accounted for about a quarter of Cairo’s trading.
“Generally, market liquidity is very low but the OCI tender offer is helping the market,” said Islam Batrawy, deputy director of sales and trading at Egypt’s Naeem Brokerage.
Cairo’s 30-stock benchmark climbed 1.1 percent to 5,245 points, but faces major technical resistance around 5,300 points, which was the support in late July and mid-August. The 100-stock index rose 1.3 percent.