Arab markets slide on Syria escalation fears

Ahram Online, Tuesday 27 Aug 2013

Egypt's main index fell 2.04 percent and other markets in the region tumbled by as much as 7 percent as investors' expectations of Western military intervention in Syria grow

Syrian Army fighters
Free Syrian Army fighters carry weapons as they take up positions during an offensive against forces loyal to Syria's President Bashar al-Assad in Aleppo's town of Khanasir August 26, 2013. (Photo: Reuters)

Egypt Bourse's main index fell 2.04 percent on Tuesday as investors acted on fears of an escalation of the conflict in Syria.

Indications that the United States and European governments were gearing up for military intervention in Syria sent stock markets across the Middle East spiraling downwards.

Saudi Arabia’s Tadawul was down 4.12 percent on Tuesday and the Qatar Exchange fell 1.28 percent, while the Abu Dhabi Securities Exchange slid 2.8 percent and Dubai's Financial Market experienced a 7 percent tumble.

Speaking at a press briefing on Monday, US Secretary of State John Kerry said it was “undeniable” that Syrian president Bashar Al Assad’s forces had used chemical weapons in an attack last week, which is believed to have killed hundreds of civilians.

US Defense Secretary Chuck Hagel told the BBC on Tuesday that the US was “ready to go” in terms of conducting military action in Syria, and the United Kingdom’s parliament will be recalled on Thursday to vote on a “clear motion” for the crisis, according to Prime Minister David Cameron. France’s foreign minister, Laurent Fabius, said inaction on Syria was unacceptable.

The entirety of Egypt’s benchmark EGX30 index was in the red on Tuesday. Blue chip Commercial International Bank slid 1.34 percent, investment bank Egyptian Fiancial Group-Hermes 2.72 percent, and Orascom Telecom 2.04 percent.

Real estate stocks were more severely affected, with TMG Holding falling 2.98 percent, Palm Hills Development Company 3.33 percent and Six of October for Development and Investment 3.93 percent.

Egyptian and Arab investors were predominantly net-buyers, whilst other foreign investors acted as net-sellers to the value of LE7.86 million, during a session which saw LE547.9 million in total turnover.

The broader EGX70 index also fell 2.3 percent.

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