DUBAI May 23 Egypt's stock market may recover
some of the previous day's heavy losses on Tuesday while Gulf
markets look set to stay within recent ranges because of a lack
of fresh news and the approach of the holy month of Ramadan.
Cairo's index tumbled 2.5 percent on Monday, its
largest single-day decline since Jan. 19, after the central bank
unexpectedly raised interest rates by 2 percentage points to
fight sky-high inflation.
The surprise prompted heavy selling by local retail
investors but several foreign fund managers said they did not
expect a lasting impact on the marketm partly because of the
loose links between interest rates and the real economy in
Egypt. Also, higher rates could attract more foreign money to
"We see today's pull back in the EGX as a buying
opportunity," Mohamed el-Jamal, managing director of capital
markets at Abu Dhabi's Waha Capital, said on Monday.
In the Gulf, Saudi Arabia may lag after Brent crude
oil, now at $53.57 a barrel, pulled back slightly from
the highs at which it was trading during Saudi business hours on
Monday. Retail investors may choose to cash out ahead of
Ramadan, which often sees lower market liquidity. Ramadan is
expected to start on Saturday.
Gulf Navigation, which jumped 5.6 percent on
Monday, may continue to attract interest in Dubai - its shares
have been surging since Thursday, partly because it posted
strong first-quarter earnings on Sunday.
One trader told Reuters that a strategic investor might be
increasing its stake in the company, although onwership data
from the exchange have not so far shown this. A broker said he
believed a local brokerage, in an effort to stimulate activity
in Dubai's recently sluggish market, was offering
over-the-counter options contracts on stocks including Gulf
(Reporting by Celine Aswad; Additional reporting by Hadeel Al
Sayegh; Editing by Andrew Torchia)