MIDEAST STOCKS-Egypt falls on capital gain tax, Gulf mkts down ...

Thu Jun 2, 2011 10:23am EDT

* Egypt?s shares fall after capital tax announcement

* Most Gulf markets down, as Qatar slumps to 11-week low

By Patrick Werr and Nadia Saleem

CAIRO/DUBAI, June 2 (Reuters) ? Egyptian shares fell on
Thursday after the cabinet announced a new capital gains tax,
while most Gulf markets slipped as investors booked recent gains
amid a weak global backdrop.

Egypt?s benchmark index .EGX30 dropped 2.7 percent, its
biggest decline since April 18, after the new tax and an
increase in income taxes were announced. [ID:nLDE7501Z3]

Osama Mourad of Arab Finance Brokerage said that while
details on how the taxes will be applied are still unclear,
equity investors are nearly certain to be affected.

?It?s obviously going to hurt them financially and hurt
long-term investment in Egypt,? he said. ?All the big companies
will make 5 percent less profit and, second, investors will pay
double taxes.?

?It indicates the current government is not working to
stimulate the economy, but instead working to cut the budget
deficit. And we doubt that in the end it will actually help to
cut the deficit.?

World stocks extended losses on Thursday and the dollar
hovered near a one-month low against major currencies after a
run of dismal economic data pointed to a faltering recovery in
the United States. [MKTS/GLOB]

?The only direction (for regional markets) is the global
moves and the growth story is looking murky,? said Matthew
Wakeman, a managig director at EFG-Hermes

Qatar?s index .QSI fell 1 percent to an 11-week closing
low, dropping for a second day after the bourse said it did not
expect foreign ownership limits to rise in 2011 from 25 percent.
Increasing the limit is seen as a key issue for the Gulf state?s
potential upgrade by influential index compiler MSCI.

Investors have begun to pull out speculative cash ahead of
MSCI?s June 21 review results on increasing doubts of inclusion.

?The index may decline to touch 8,150, which will be a very
good buying opportunity, and rebound sharply,? said Omnia
Ashawmy, head of technical analysis at Qatar Securities.

Dubai?s index .DFMGI slipped 0.5 percent, easing from
Wednesday?s 10-day high.

Most large-caps fell with Dubai Financial Market (DFM.DU)
losing 1.6 percent.

?We saw some good cash coming in on MSCI, quite speculative
cash, which will take profit quickly as well (on global
weakness),? Wakeman added.

In Kuwait, the index .KWSE dropped 0.8 percent to an
eight-week low, weighed by banking stocks.

National Bank of Kuwait (NBKK.KW), the country?s largest
stock by market value, fell 1.7 percent and telecoms operator
Zain (ZAIN.KW) slipped 1.9 percent.

Other bank shares also slid, with Gulf Bank (GBKK.KW) and
Boubyan Bank (BOUK.KW) down 1.8 and 1.7 percent respectively.

Abu Dhabi?s banking stocks lifted the index .ADI 0.3
percent to a three-week high, bucking the regional trend.

Abu Dhabi Commercial Bank (ADCB.AD) gained 0.3 percent after
Fitch gave it an A+ rating and a stable outlook. [ID:nFIT577858]

ADCB is a major shareholder in RHB Capital (RHBC.KL) and the
Malayian bank is the subject of takeover interest from two rival
lenders in a move that would create one of the most valuable
banking group in Southeast Asia. [ID:nL3E7H103U]

First Gulf Bank (FGB.AD) and National Bank of Abu Dhabi
(NBAD.AD) rose 0.3 and 0.5 percent respectively.

THURSDAY?S HIGHLIGHTS

EGYPT

* The measure .EGX30 fell 2.7 percent to 5,362 points.

QATAR

* The benchmark .QSI retreated 1 percent to 8,240 points.

KUWAIT

* The measure .KWSE slipped 0.8 percent to 6,339 points.

DUBAI

* The index .DFMGI eased 0.5 percent to 1,566 points.

ABU DHABI

* The benchmark .ADI climbed 0.3 percent to 2,673 points.

OMAN

* The index .MSI gained 0.1 percent to 6,082 points.

BAHRAIN

* The measure .BAX eased 0.7 percent to 1,339 points
(Editing by Firouz Sedarat)

Source: http://g7finance.com/g7finance-news/mideast-stocks-egypt-falls-on-capital-gain-tax-gulf-mkts-down/

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