Profit-taking hit stocks in Saudi Arabia and Egypt on Monday following strong rallies in both markets, while general weakness in emerging markets dragged down the United Arab Emirates and Qatar. Saudi Arabia›s stock benchmark Tadawul All Share Index slipped 0.5 percent to 6,631 points, ending seven consecutive sessions of gains in the heaviest trading volumes since April. Petrochemical shares lost their footing as Brent futures fell below $44.50 a barrel, heading for their lowest settlement since August. Heavyweight producer Saudi Basic Industries fell 0.6 percent. The banking sector was mixed as Saudi central bank officials told a news conference that they wanted money rates to fall further, easing a liquidity squeeze in the sector. They indicated that more fund inflows into the banking system were expected. Meanwhile, Cairo›s blue chip index, which had soared 28.1 percent since the Egyptian pound was floated on Nov. 3, fell 2.0 percent ending 12 consecutive sessions of gains. The broader EGX100 index dropped 0.8 percent. Exchange data showed non-Arab foreign investors remained net buyers of stocks to the tune of about $6.7 million, a smaller amount than in previous days. Many Egyptian blue chips surged after the pound›s float partly because the depreciation of currency meant companies› dollar-denominated global depositary receipts were suddenly worth much more in local currency. But that effect now appears to have largely run its course. The Cairo-listed shares of Commercial International Bank , for example, fell 3.9 percent to 66.60 Egyptian pounds. At $4.26, its GDRs were worth 67.10 pounds at an exchange rate of 15.75 pounds to the dollar. In the Gulf, foreign exchange pegs mean foreign investors do not have to worry about currency depreciation against the US dollar. Nevertheless, Dubai›s main index lost 0.9 as builder Arabtec dropped 2.3 percent. The company reported a narrower quarterly loss of 225.5 million dirhams ($61.4 million) compared with a 944.8 million loss in the same period of last year. Index compiler MSCI is due to announce the results of its semi-annual index review at the end of the day. VTB Capital said in a note that it estimated an 80 percent probability that DXB Entertainments would replace Arabtec in MSCI's emerging market index. Shares in the amusement park builder closed down 0.7 percent. VTB Capital also expects Dubai Financial Market, the only listed Gulf exchange, to be excluded from the index. Its shares dropped 1.8 percent. Similarly, Abu Dhabi›s index fell for a fourth straight session, closing 1.2 percent down. In Qatar, the index slipped 1.3 percent in modest volume to a fresh five-month low. Twelve of the 13 shares that are members of the MSCI emerging market index fell, with Qatar Navigation losing 3.5 percent. — SG/Reuters
