By Una Galani
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

LONDON — Investors in Saudi Arabia are finally thinking the unthinkable. As the wave of uprisings sweeping across the region edges closer to its borders, the arrest of a Shi’ite cleric in the Sunni-ruled kingdom’s restive, oil-rich Eastern Province helped trigger a 7 percent fall in the Middle East’s biggest market. The $20 billion-plus outflow is a worrying omen.

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Una Galani

LONDON — Economic sanctions now can only have a limited impact on Libya. Imposing travel bans and asset freezes against Muammar Gaddafi and his inner circle, as well as an embargo on any arms trade with the country, may be a politically welcome gesture. But at this stage of violent unrest, the agreement by the 15-member U.N. Security Council can only remain symbolic.

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Una Galani

LONDON — Libya’s $70 billion sovereign wealth fund was just starting to show some ambition before the country was plunged into crisis. Now investors who sit alongside the Libyan Investment Authority are understandably nervous. There’s no precedent for what will happen to the fund’s stakes in various Western entities if the regime falls, and there has never been much transparency around the institution’s inner workings.

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

By Una Galani and Fiona Maharg Bravo

Arab unrest will test the limits of the Organization of the Petroleum Exporting Countries. The oil cartel has enough spare capacity to cope with disruptions from Libya and elsewhere. However, the quality of crude differs, and supply could be squeezed if other member countries were to come under threat.

By Una Galani
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

LONDON — Chaos in Libya could pose a threat to Mediterranean economies. The unrest in the oil-rich North African country, and the subsequent bloody reaction of its authoritarian regime, could soon present a serious strategic challenge for Western governments and corporate titans that recently embraced the long-pariah state.

Nokia’s new chief executive has fluffed his big moment. Stephen Elop has tied the fate of the Finnish handset maker to Microsoft  in a strategic partnership designed to regain ground in smartphones amid brutal competition from Apple and Google. The tie-up is Nokia’s least bad option if it doesn’t want to turn into a commoditized handset maker. But Elop’s hotly anticipated strategic overhaul falls short by several measures.

The Microsoft alliance is radical. It means Nokia effectively ditches its proprietary Symbian software platform which has over 200 million users in favor of a Windows operating system. This is an economic and psychological shift: Symbian accounted for half of Nokia’s sales in 2010, according to Arete Research. A successful partnership would bring brand awareness and reach to Windows Phone and help the Finnish group defend its 29 percent gross margin in the handset business. Microsoft’s added financial muscle will also be a big boost in technology development.

By Una Galani
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

LONDON — Government bribes to keep the people on side will only deepen Egypt’s financial mess. The fragile administration of President Hosni Mubarak is desperately seeking to shore up support in the face of ongoing protests. The latest tactic is a 15 percent hike in public sector pay and pensions. While that could potentially buy the support of about 13 percent of the population, it is a strain the public purse can do without.

Egypt’s financial system faces a moment of truth. The country didn’t have an economic crisis before the past ten days of protests began. But its banks and stock exchange have been closed for a week. When they reopen, starting on Sunday, the fear is that the political turmoil could prompt a financial meltdown.

The central bank is due to reopen on Sunday, while stock market trading will resume the next day – though that could be delayed if violent clashes continue. So far, markets across the Mid-East region have largely ignored the unrest. Yet before the Egyptian market closed, there were signs that investors were fleeing.

Investors in Egypt should not expect a rapid investment bounce back — even if the current political troubles are resolved with speed. A week of unrest has closed financial markets and burnt investors who had underestimated the risks involved in the country’s governance weaknesses. To undo the damage, Egypt needs a roadmap that assures investors that things will be better than they were before the protests began.

Investors had a good run of late in Egypt. The economy was forecast to grow at around 6 percent this year and the country’s benchmark stock market index had risen nearly 80 percent in the last two years, making it one of the best performing in the region. It traded at around 12.5 times earnings before the unrest, according to EFG Hermes. That was in line with exchanges in Qatar and Abu Dhabi which are more politically stable. But Egypt’s main equity market has shed over a fifth of its value amid the unrest.