Saturday, January 29, 2011

Saudi exchange tumbles on Egypt protests

CAIRO (AP) _ Saudi Arabia's stock exchange tumbled by over
4 percent on Saturday, setting the stage for other regional
markets to drop as concerns mounted about the violent
protests in Egypt that presented the most serious challenge
to President Hosni Mubarak's roughly 30-year rule.
The Saudi Tadawul was down 4.1 percent to 6,419.89 points
by about 1:15 p.m. Saudi time. The market in Saudi Arabia,
where the start of the work week is Saturday, was the first
to react to the violence in Egypt and the drop in the TASI
offered a window into the potential battering that could
emerge when other regional markets reopen on Sunday.
+The fall is due to sentiment about what's happening in
Egypt, and also in the US because the Dow went down; on
Friday, said John Sfakianakis, chief economist at the
Riyadh-based Banque Saudi Fransi-Credit Agricole Group.
+You have some collateral damage which is related to
investors .... who have exposure in Egypt, and are trying
to hedge that exposure by selling down their positions in
Saudi Arabia,; he said.
Tens of thousands of protesters clashed with riot police
on Friday, the fourth day of violent demonstrations in
Egypt. The protesters have demanded Mubarak's ouster and
measures to deal with the crippling poverty in the country,
rampant corruption and the growing disparity in income
The rioting _ inspired by similar protests in Tunisia two
weeks earlier _ prompted Mubarak, who has ruled the Arab
world's most populous nation for nearly 30 years, to ask
his cabinet to step down. But that move appears unlikely to
significantly allay the anger of Egyptians who argue that
the 82-year-old leader is sorely out of touch with their
daily lives.
The violence sent Egypt's benchmark index tumbling almost
17 percent over two days, and analysts expect that the
violence on Friday will fuel another plunge on the Egyptian
Exchange and ripple across other regional markets.
+The momentum is there,; said Sfakianakis, predicting
that regional markets drop.
+There's no reason to expect the Saudi market to go up
because the general sentiment is sell-off and wait- and-see
rather than sell-off and immediate buying,; he said.

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