DUBAI/CAIRO: Foreign institutions and funds bought into Egypt's beaten-down stocks with heavyweight Orascom Construction Industries (OCI) climbing 4.5 percent. The index rose 0.8 percent, trimming its 2011 losses to 43.3 percent. "There is talk in the market that foreign institutions and funds are snapping up Egyptian blue chips, which are at very low prices," said Osool Brokerage's Mohamed Swefy. But a sharp rebound of the index off an intra-day low of 3,820 points in the past three days, to a close of 4,050 on Wednesday, suggests the market may have found a fairly solid bottom because of cheap valuations, though many analysts think an extended rally is unlikely given political tensions. Meanwhile, the United Arab Emirates' largest bank by assets, Emirates NBD, dragged Dubai's main stock index down to a 31-week low on Wednesday, falling for a second day after news that it would take over Dubai Bank. Most other Gulf markets also fell. ENBD dropped 4.3 percent to a 27-week low after sinking 1.6 percent on Tuesday, while the Dubai index slipped 0.3 percent to its lowest close since March 7. Investors said they saw little benefit from the takeover for ENBD as it would probably have to deal with any losses accumulated by Dubai Bank. But they also predicted the downside would be minor. "We estimate that even in the worst case scenario, the impact on ENBD, based on simplistic assumptions, is likely to be limited," EFG Hermes said in a note. "DB is a much smaller entity compared to ENBD." In Oman, shares fell 0.8 percent to a seven-week low, led by weakness in bank stocks. "We saw strong selling pressure from asset managers in the country," said Adel Nasr, United Securities brokerage manager in Muscat. "They started to liquidate and foreign institutionals have their own fears over the European crisis. They want to keep cash on the side." Heavyweight Bank Muscat shed 0.8 percent, Bank Dhofar slipped 0.2 percent and National Bank of Oman declined 2.6 percent. Bank Muscat reported a 15.8 percent increase in third-quarter net profit on Wednesday, edging ahead of analysts' forecasts. In Kuwait, telecoms operator Zain fell 1.1 percent. Affiliate Zain Saudi reported a narrower third quarter loss on Wednesday but the results still missed estimates; its stock ended flat. Saudi Arabia's shares fell for a second day as investors booked profits in insurance stocks. The kingdom's benchmark index slipped 0.2 percent while the insurance index fell from Tuesday's four-month high, dropping 1.6 percent. The market showed very little reaction to Washington's accusation that Iran backed a plot to kill the Saudi ambassador to the United States. Investors have grown used to tensions between Saudi Arabia and Iran and it is not yet clear if the plot accusation will develop into a full-blown crisis. Also, foreign investment in the Saudi market is at low levels for economic reasons, so the market is not vulnerable to a sudden pull-out. Qatar's benchmark index bucked the regional trend and rose 0.8 percent to a two-week high. Traders said institutions were buying in ahead of quarterly earnings, and were attracted by cash dividends from bank stocks at year-end. Commercial Bank of Qatar gained 2.8 percent, Qatar National Bank rose 0.6 percent and Doha Bank climbed 1.3 percent.
