(MENAFN- Arab Times) The bear run on Egypt's stock market continued on Wednesday as property developer Emaar Misr slid further in the wake of its listing, while weak oil prices weighed on the Gulf. The Egyptian stock index tumbled 2.6 percent to a 15-month low of 7,551 points, bringing its losses from February's multi-year peak to 25 percent.
The market has been hit by a perfect storm in the last few weeks: Egypt's energy and foreign exchange shortages, a decision by the central bank to resume depreciating the Egyptian pound, and an order by the bourse that Egyptian investors who buy global depository receipts (GDRs) by purchasing shares in Egyptian pounds may only receive their returns in that currency.
Security fears after deadly clashes with Islamist militants in the Sinai, the assassination of Egypt's top public prosecutor in Cairo, plus the Greek debt crisis - the euro zone is a top trading partner and source of tourists for Egypt - have also hurt. Margin calls have added to the selling in recent days.
Property developer Emaar Misr slid a further 5.5 percent to 3.28 pounds. It has plunged from an initial public offer price of 3.80 pounds since it listed on Sunday, becoming a symbol of the market's panic.
Before the IPO, which was heavily oversubscribed, analysts put fair value for the stock at around 4.70 pounds. But investors have focused since then on the fact that valuations of other property firms relative to their assets are even lower.
Palm Hills Development, another big real estate firm, dropped 4.4 percent on Wednesday.
Arab Cotton Ginning, which had dropped 2.5 percent on Tuesday after the government said it was halting all cotton imports to try to assist production and marketing of the local crop, fell further in early trade but recovered to close up 0.4 percent.
The chairman of the Egyptian Chamber of Textile Industries said the textiles sector would be hurt by the lack of cheap cotton imports.
"The market had run ahead of itself - developments haven't kept up with the hype," Sherif Salem, portfolio manager at Invest AD, a major Abu Dhabi fund firm, said of Egypt's slide.
The bear market has brought Egyptian valuations, which were over 10 percent above emerging markets as a whole at one stage, more closely in line; the index is now trading at about 13.5 times trailing earnings, Thomson Reuters data shows, against around 13.2 for the MSCI emerging market index.
This should eventually help to stabilise Egyptian stocks, perhaps when global market turmoil dies down and the Cairo government formalises previously announced reforms such as a cut in the corporate income tax ceiling, Salem said.
He noted that some stocks were back at late 2013 levels, which did not seem reasonable given improvements in Egypt's economic policymaking and outlook since then. "The positive medium- and long-term outlook is still there."
A monthly Reuters survey of 15 Middle East fund managers, published last week, found them on balance still positive on Egypt. However, non-Arab foreign investors have become net sellers in the past few days, exchange data shows.
Meanwhile, most Gulf markets fell in modest turnover because of weak oil prices and global market instability due to the Greek crisis and China's equities crash.
The Saudi stock index slipped 0.3 percent as Saudi Basic Industries, a petrochemical blue chip which is sensitive to oil prices, lost 0.8 percent.
Samba Financial Group, the third-largest bank by assets, fell 0.7 percent after its board recommended a 0.45 riyal per share dividend for the first half of 2015. That was lower than the 0.65 riyal which the bank said it would pay for the corresponding period of 2014.
But Al Rajhi Bank, the second-largest lender, jumped 1.9 percent ahead of the release of its second-quarter earnings after the close.
The Dubai stock index slid 1.4 percent. Construction firm Arabtec dropped 2.8 percent after saying its group chief financial officer, human resources officer and general counsel had resigned, the latest in a series of management upheavals at the company since June last year.
Abu Dhabi's index edged down 0.7 percent as Aldar Properties dropped 3.7 percent. Qatar's market fell 1.3 percent as Industries Qatar, another big petrochemical producer, lost 2.2 percent.
Saudi Arabia
* The index edged down 0.3 percent to 9,058 points.
Dubai
* The index dropped 1.4 percent to 3,987 points.
Abu Dhabi
* The index fell 0.7 percent to 4,692 points.
Qatar
* The index lost 1.3 percent to 11,787 points.
Egypt
* The index fell 2.6 percent to 7,551 points.
Kuwait
* The index edged up 0.2 percent to 6,157 points.
Oman
* The index dropped 0.4 percent to 6,403 points.
Bahrain
* The index edged down 0.2 percent to 1,336 points.
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