Saudi Arabia, Egypt inch down ahead of Ramadan
Stock markets in Saudi Arabia and Egypt slipped in early trade
Stock markets in Saudi Arabia and Egypt slipped in early trade on Wednesday, the last day before the beginning of the Muslim holy month of Ramadan, during which trading activity usually slows considerably.
The main Saudi index inched down 0.1 percent as most blue chips declined. Alinma Bank, the most traded stock, slipped 0.1 percent while runner-up Saudi Basic Industries was unchanged.
Some market players had expected this Ramadan to be different in Saudi Arabia, which this week opened its market to direct foreign investment.
But modest volumes in the first two days of trade after the opening indicate foreigners are in no rush to buy local stocks. Stock exchange data showed no fresh, significant purchases by licensed foreign investors on Tuesday.
"It seems few (foreign institutions) are interested in or able to get qualified foreign investor status in Saudi Arabia," said Ilya Feygin, managing director at New York-based WallachBeth Capital.
Current high valuations for Saudi stocks and a requirement for same-day settlement of trades mean many foreigners are in no rush to enter Saudi Arabia. Many of those who do want to buy Saudi equities are content for now to continue doing so indirectly through channels such as participatory notes.
Egypt's index slipped 0.2 percent with most stocks negative. Heavyweight Commercial International Bank fell 0.8 percent to 57.80 Egyptian pounds, retreating further after it failed this week to break through technical resistance at its March and May peaks of 59.01-59.20 pounds.
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