CAIRO/DUBAI: Egypt's Orascom Telecom (OT) suffered its largest decline in five weeks on Tuesday on talk that Algeria will reject its appeal against back-tax claims totaling hundreds of millions of dollars. Middle East markets fell, tracking losses on global bourses as fears that Ireland's fiscal problems could spread to more euro zone countries weighed on investor sentiment. "We're getting close to the year-end and so people are cautious about initiating new big positions," said Hashem Montasser, EFG-Hermes managing director and head of regional asset management. "They are happy to just tweak their positions and follow global markets, which is why our volumes are low." OT fell 5 percent, its largest decline since Oct. 27. "We've had reports in the past few days of a refusal of a request from OT regarding the reconsidering of the tax claims," said Nader Khedr, an investment and capital market analyst. He said bumps on the road to Algeria choosing an adviser in its planned purchase of OT's local unit Djezzy were adding to the uncertainty. OT's Algerian difficulties are complicating a plan to sell most of the Egyptian company to Vimpelcom. Amer Group ended at LE 2.90 ($0.50) on its first day's trading on the Cairo bourse, having hit an intraday high of LE 3. Its initial public offering price was LE 2.80 per share. The Saudi index fell for a first day in four as Samba Financial Group extended losses, dropping 1.7 percent. Yet the longer-term trend remains positive, said Hesham Abo-Jamee, Bakheet Investment Group head of asset management, with petrochemicals and banks — the two dominant sectors on the bourse — expected to report a quarter-on-quarter rise in fourth-quarter profit. "Bank profits should increase 15 percent after they take lower provisions," said Abo-Jamee. "Bank shares have fallen sharply, but they are ready to rebound next year." These expectations are spurring some investors to take positions now, he added. In Doha, Masraf Al Rayan fell 0.6 percent and Qatar Navigation lost 0.9 percent as traders awaited Thursday's FIFA vote to decide the decide the host nation for the 2022 soccer World Cup. Qatar is competing against the United States, Australia, Japan and North Korea. "If Qatar wins, then there will definitely be some upside," says Robert Pramberger, acting head of asset management at Doha-based investment company The First Investor. "People are getting excited and there would be a huge investment program to get Qatar ready for the World Cup, which will trickle down to infrastructure, cement and bank stocks." Dubai's index fell 0.4 percent as investors await news from Dubai Holding. The group, owned by Dubai's ruler, has two loans totaling $1.8 billion maturing on Tuesday. "Dubai Holding bond prices imply the market is not expecting a default," added EFG's Montasser. "If there's an extension for a month or two, it will be a non-event, but if they get a longer term it will be positive."
