Israeli shares fell the most since March, leading a drop in Middle East stocks, on investor concern an accord between political groups in the Palestinian territories may threaten regional stability and amid violence in neighboring Syria.
Perrigo, the maker of over-the-counter drugs, dropped the most since Nov. 10 and Gazit-Globe Ltd., a multinational real-estate investment company, tumbled to the lowest in almost a month. The Tel Aviv 25 Index of the country’s 25 biggest companies lost 1.4 percent, the most since March 13, to 1,296.03 at the 4:30 p.m. close in Tel Aviv, bringing the four-day drop to 3.4 percent. Dubai’s measure closed at the lowest since April 14 and the Bloomberg GCC 200 Index lost 0.4 percent.
Hamas, an Islamist group that rules the Gaza Strip, and Fatah, which holds sway in the West Bank, signed a preliminary accord on April 28 to end their almost four-year divide, form a unity government and hold elections. Israel in response delayed tax funds to the Fatah-dominated Palestinian Authority until receiving proof that the money won’t go to Hamas. Israel, the U.S. and the European Union consider Hamas a terrorist group.
“Geopolitical issues, such as the Hamas-Fatah treaty, the opening of the Rafah crossing by Egypt and the Syrian unrest are weighing on the local market,” said Yuval Amiram, head of institutional sales at Tel Aviv-based IBI-Israel Brokerage & Investments Ltd.
Egypt plans to open its border crossing with the Gaza Strip, possibly within the next two weeks, the Foreign Ministry said on April 29, as Israel expressed concern over its neighbor’s ties with Hamas. In Syria, the death toll from anti-government protests has climbed as President Bashar al-Assad’s regime intensified a crackdown on people who defied warnings not to hold demonstrations.
In the United Arab Emirates shares fell after earnings missed estimates and the country’s bourses extended the date brokerages have to switch to a new settlement system.
Dubai’s DFM General Index fell 0.4 percent to 1,628.43 at the 2 p.m. close in the emirate and Abu Dhabi’s measure lost 0.2 percent.
Valuations look “attractive” although “with earnings coming in below estimates for U.A.E. companies, the lack of solid lending to the private sector and the delay of DvP implementation, we see a lack of catalyst in the near future,” said Tariq Qaqish, director and fund manager at Al Mal Capital PSC in Dubai.
The country’s stock exchanges said last week they will give brokerages and custodians one more month to switch to the so-called delivery-versus-payment system, one of MSCI Inc.’s criteria for an upgrade to emerging markets. MSCI is scheduled to announce the results of its review in June, according to its website.
The 30 companies on the Dubai index trade at 8.5 times estimated earnings, according to data compiled by Bloomberg. That compares with 11.7 times for the MSCI Emerging Markets Index.
Emaar Properties PJSC, the builder of the world’s tallest skyscraper, fell 1.2 percent to 3.25 dirhams, the lowest level since April 11. The company said April 24 first-quarter profit slumped 45 percent, missing analysts’ estimates. Sorouh Real Estate Co., Abu Dhabi’s second-biggest property developer by market value, dropped for a second day, slipping 0.7 percent to 1.41 dirhams after reporting first-quarter profit slumped 50 percent last week.
Kuwait’s SE Price Index declined 0.2 percent, Qatar’s gauge fell 0.1 percent and Saudi Arabia’s Tadawul All Share Index lost 0.4 percent. Oman’s measure was little changed.
Perrigo retreated 4.1 percent to 301.20 shekels and Gazit-Globe declined 2.2 percent to 45.10 shekels. The yield on the benchmark Mimshal Shiklit government bond due January 2020 rose two basis points to 5.33 percent. The shekel gained 0.3 percent to 3.3866 per dollar on April 29.
Markets in Egypt and Bahrain are closed for a holiday.