DUBAI, March 23 (Reuters) – Egyptian share prices will soon rebound, with fear the primary cause of Cairo’s sell-off rather than a marked change in the country’s economy, although some listings will underperform due to their links to the old regime, say market analysts.

Cairo’s stock exchange reopened on Wednesday following an eight-week suspension, the first day’s trading since popular protests ended former president Hosni Mubarak’s 30-year rule.

This unrest ravaged the country’s tourist industry and briefly paralysed many businesses, including banks, leaving the Arab world’s most populous nation on the brink of recession, but with some stocks down more than 30 percent this year, this contraction should already be priced in.

“In the short-term, Egypt is getting back to normal pretty quickly and the market will feed off that,” said Akram Annous, MENA strategist at Al Mal Capital in Dubai.

“Markets only really plunge when there’s a bank or economic crisis usually tied to some sort of over-investment or excessive leverage cycle and we’re not seeing any of those things in Egypt. It has been nothing more than headlines and fear driving the market lower and so the trend can reverse pretty quickly.”

Cairo’s benchmark index fell 8.9 percent to 5,143 points on Wednesday, taking its 2011 declines to 28 percent, with 23 out of 30 stocks plunging more than 9 percent.

“I wouldn’t be selling Egypt now,” said Al Mal’s Annous. “I think the buyers will wait one or maybe two more sessions. I might not be saying buy Egypt stocks long-term, but I would be willing to get long here for a short-term trade.”

DUBAI, March 23 (Reuters) – Egypt’s benchmark .EGX30 tumbled on Wednesday in the first day’s trading since the fall of former president Hosni Mubarak, but Gulf Arab markets were steady in light trade.

Egypt’s index plunged 8.9 percent, taking its 2011 losses to 28 percent. Trading had been suspended since Jan. 27.

Of 30 stocks on Cairo’s top index, 23 fell by more than 9 percent. [ID:nLDE72M0QC]

“Once Egypt’s market stabilises, foreign flows will come back strongly into regional markets, especially Oman, Qatar and Saudi Arabia because they offer the best valuations,” said a Riyadh-based trader who asked not to be identified.

Saudi Arabia’s index rose 0.3 percent to a four-week high as investors looked to the country’s upbeat economy, with extra state spending announced last week well received by investors. The measure is down 3.9 percent this year.

“We’ve made a V-shaped recovery from the market meltdown, but people have yet to price in increased petrochemicals prices,” said the Riyadh-based trader, says the trader.

Banks and petrochemicals are the two main sectors on Saudi’s bourse, with the latter’s prices closely tied to oil. [O/R]

DUBAI, March 22 (Reuters) – Gulf Arab markets were steady on Tuesday, consolidating recent gains, with investor risk appetite rising as concerns over unrest in Bahrain eased, while traders seemed unfazed by political turmoil in Yemen.

UAE markets rose, with traders increasingly betting the country’s safe haven status will boost stocks. Dubai’s benchmark hit a month-high, while Abu Dhabi volumes hit a three-month peak.

Emaar Properties EMAR.DU and Emirates NBD (ENBD.DU: Quote, Profile, Research, Stock Buzz), Dubai’s two top stocks, rose 1.7 and 1.3 percent respectively.

“Politically speaking, things are looking a lot clearer now … the GCC is pretty much immune to what’s happening outside its borders,” said Haissam Arabi of Gulfmena Alternative Investments. “The worst is over for the GCC.”

Seven people have died in a crackdown in Bahrain over the past week, with the country now under martial law as the Sunni monarchy tries to stamp out dissent among the Island’s Shi’ite majority. [ID:nLDE72L06X]

The later-closing Saudi Arabia index slipped 0.2 percent after being up in early trade, trimming its weekly gains to 4.5 percent.

“Initially, there was de-risking across the region, but at some stage people had to realise that this was overdone and so markets have come back strongly,” said Shahid Hameed of Global Investment House.

DUBAI, March 21 (Reuters) – Most Gulf Arab markets rose on Monday, but gains prompted by Saudi Arabia’s latest $93 billion social spending plan were tempered by doubts over how this would be implemented.

Saudi Arabia’s index , the largest Gulf Arab market, rose 0.2 percent, having surged 4.5 percent on Sunday, with regional markets rallying after the kingdom offered $93 billion in social handouts in a bid to neuter dissent. [ID:nLDE72H0ZC]

“I think we will have a day or two more to go, but then questions will start to come about the time frame for the Saudi stimulus and the costs associated to waste at the bureaucratic level,” said Robert McKinnon, ASAS Capital chief investment officer. “Much of the stimulus is going to the people that are happy and have jobs, or own companies and land. I don’t see any intent at actual reform. So it seems to me this is a PR stunt.”

Market bellwether Saudi Basic Industries Corp (2010.SE: Quote, Profile, Research, Stock Buzz) (SABIC) rose 0.5 percent, but lender Samba Financial Group 1090.SE fell 0.9 percent.

“Attention towards stock and sector fundamentals remain distracted, with big-picture geopolitical events in Libya, Yemen and Bahrain dominating investor’s minds,” said Amro Halwani, a senior trader at Shuaa Capital in Riyadh.

“Whilst most markets across the GCC fret over the escalation of tensions, at least Saudi investors have the reassurance of massive government financial intervention, and therefore presumably a sensible floor under equity prices.”

Abu Dhabi’s index rose for a second day, climbing 0.5 percent, but Dubai’s benchmark ended a three-session rally, slipping 0.2 percent.

DUBAI, March 20 (Reuters) – Kuwait’s Zain (7030.SE: Quote, Profile, Research, Stock Buzz) should remain for sale following Etisalat’s failed $12 billion takeover, but buyers will be wary, with nearby Bahrain under martial law and borrowing costs and risk both rising.

Any buyer will also miss telecoms operator Zain’s $3.1 billion dividend payout, so would likely bid below Etisalat’s (ETEL.AD: Quote, Profile, Research, Stock Buzz) 1.7 dinars-per-share offer for a 46 percent controlling stake, which the UAE firm withdrew on Saturday.

Zain shareholder, the Kharafi group, was the architect of the Etisalat deal, but rival shareholders were unhappy Kharafi would net all brokerage fees and exclude them from the sale.

“Unlike a lot of telecoms companies, Zain has financial investors at the helm and they are likely to remain sellers,” said a telecoms analyst who spoke on condition of anonymity.

In January, a Zain board member said Turkey’s Cukurova Holding [CUKRO.UL] was in talks to buy a 29.9 percent stake in Zain, but no formal offer was made. Vivendi (VIV.PA: Quote, Profile, Research, Stock Buzz) earlier eyed Zain’s African assets and France Telecom (FTE.PA: Quote, Profile, Research, Stock Buzz) is chasing growth in the Middle East and Africa.

“Once regional markets stabilise, Kharafi could be a seller again and there are potential buyers – Zain has good assets and is the number one or two player in almost all markets in which it operates,” said Irfan Ellam, Al Mal Capital telecoms analyst.

WINDFALL MISSED

DUBAI, March 17 (Reuters) – Gulf Arab markets are likely to remain volatile next week as deadly sectarian strife in Bahrain spooks investors.

Regional bourses extended gains after a Saudi “Day of Rage” passed without incident on Friday after a heavy security presence deterred would-be protesters. The Saudi and Qatar indexes hit three-week highs on Sunday, but renewed unrest in Bahrain has made investors wary again and markets are in retreat.

Saudi Arabia, which is home to a sizeable Shi’ite community in its oil-producing east, has sent troops to Bahrain to support the island’s Sunni monarchy.

The Bahrain government has declared martial low, imposing a 12-hour curfew and banning all demonstrations as it tries to quell mounting anger among its Shi’ite majority, which claims it suffers discrimination. Five people died as state forces cleared a protest camp in the capital Manama on Wednesday.

“Now other parties are involved in Bahrain, it could open Pandora’s Box in terms of multiple scenarios,” said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments. “Risk premiums are probably even higher than before. We are in a bearish trend.”

This is weighing heavy on regional markets, which plunged to multiyear lows in early March before recovering some of these losses, while foreign investors have largely fled, seeking more stable alternative markets.

“At the start of the year, we were bullish on both regional equity markets and bonds of high beta names,” said Abdul Kadir Hussain, chief executive and fund manager Mashreq Capital.

DUBAI, March 15 (Reuters) – Gulf Arab markets fell on Tuesday as Japan faced up to a potential nuclear catastrophe and Bahrain declared martial law in the island kingdom.

“The whole focus is on risk aversion trade [because of] what’s happening in Bahrain and Japan,” said Matthew Wakeman, EFG-Hermes managing director for trading. “I think investors realised they entered the market too strongly last week.”

Gulf markets rallied hard to Sunday’s close, recovering from early-March multiyear lows, but this trend has reversed again and further declines are forecast.

Shares in Saudi Arabia .TASI, the world’s top oil exporter, slid 3.5 percent. Crude CLc1 was down 3.5 percent at $97.69 per barrel at 1225 GMT. [O/R]

“The net effect of Japan on Saudi Arabia will be negligible - it’s more of a sentiment thing, with crude falling,” said a Riyadh-based trader who spoke on condition of anonymity.

“There’s a lot of value in the Saudi market. If there’s a big sell-off in petrochemicals I would get buying with an eye on Q1 earnings.”

Petrochemicals firm are expected to post strong quarterly results after oil prices spiked in early March, with crude seen as a proxy for both petrochemicals prices and demand.

DUBAI, March 13 (Reuters) – Kuwait’s Zain (ZAIN.KW: Quote, Profile, Research, Stock Buzz) hit a month-high on Sunday after receiving a new bid for a stake in its Saudi unit, while Gulf Arab stocks rose as investor fears unrest would spread to top oil exporter Saudi Arabia eased.

Dubai’s index made its largest gain in 15 months, Saudi Arabia .TASI edged up to a three-week high and Qatar rose for a fifth session, but analysts were cautious, warning a likely weaker opening in Asia on Monday following Japan’s devastating earthquake would spark regional profit taking.

Telecoms operator Zain (ZAIN.KW: Quote, Profile, Research, Stock Buzz) climbed 4.4 percent and affiliate Zain Saudi,7030.SE> rose 9.2 percent.

Kingdom Holding 4280.SE, up 6.9 percent, and Bahrain Telecomm BTEL.BH (Batelco) have a made a joint bid for a quarter-stake in Zain Saudi after parent Zain earlier rejected individual offers from the two firms. [ID:nLDE72C01N]

UAE Etisalat’s (ETEL.AD: Quote, Profile, Research, Stock Buzz) $12 billion takeover offer of Zain depends on the latter selling its Zain Saudi holding, with Etisalat active in the kingdom through unit Mobily 7020.SE.

“Agreeing a deal for Zain Saudi would be a major milestone towards facilitating the Zain-Etisalat deal,” said Simon Simonian, Shuaa Capital telecoms analyst.

Etisalat climbed 0.9 percent, while Batelco ended flat.

DUBAI, March 10 (Reuters) – Gulf Arab markets edged higher on Thursday, extending a week-long rebound as investors became more comfortable with heightened geopolitical risk and stock volatility eased.

“The market was overdone to the downside, so we saw a strong rebound and it will return to levels where daily moves of 1 to 2 percent will again be the norm,” said Robert Pramberger, acting head of asset management at Doha’s The First Investor. “When people are less worried, more long-term investors will come in.”

Qatar’s index , bolstered by the country’s buoyant economy, took its weekly gains to 9.9 percent.

“The fundamental factors that underpin growth prospects are still intact, given the high oil prices and the ambitious economic and social programs put forth by the regional governments,” said Shakeel Sarwar, head of asset management at Securities & Investment Co (SICO) in Bahrain. “Markets are likely to be up for the year.”

Industries Qatar IQCD.QA (IQ) climbed 1.2 percent, with the chemicals producer likely to benefit from oil price gains.

“Although Industries Qatar’s (IQ) fourth-quarter earnings were a disappointment, we’re looking for a very good 2011 for the company,” said Ankit Gupta, senior research analyst at Securities & Investment Co (SICO) in Bahrain.

He forecast IQ’s full-year earnings would rise 30 percent this year, while the stock is trading at a forward price-to-earnings ratio of less than 10.

DUBAI, March 10 (Reuters) – Gulf Arab markets may be on the up following a sell-off sparked by political unrest in the region, but investors betting bumper state budgets will translate into higher corporate profits could be disappointed.

“There has been a major rise in government spending, but much of this is filling the gap vacated by private sector investment,” said Robert McKinnon, ASAS Capital chief investment officer. “The starting point was in negative territory because the financial crisis created a gap in private sector investment.”

Economic fundamentals are helping Qatar and Saudi Arabia recover recent losses more quickly than neighbouring markets, with the Doha and Riyadh benchmarks rising 9.1 and 14.8 percent this week, while Kuwait and Dubai remain within 100 points of six-year lows.

Regional stocks plunged on worries that deadly protests in Oman and Bahrain, part of wider Middle East unrest, would spread to neighbouring Saudi Arabia, the world’s top oil exporter, but buying by Saudi state-linked firms helped markets turn around.

Gulf Arab states will discuss a plan this week to provide aid to less prosperous Bahrain and Oman, with rulers seeking to ease internal dissent through social and infrastructure programmes, but many investors seem disappointed by the failure of big state spending plans to translate into corporate profits.

“Private sector investment is significantly more efficient and has a much higher multiplier effect in the economy, whereas governments tend to be more bureaucratic and wasteful, so the multiplier effect is much smaller,” said ASAS’s McKinnon.

“The impact has been muted, especially in Kuwait, plus the UAE, which had a significant gap following excessive private sector spending from 2006 to 2008.”