Tuesday, February 1, 2011

Tension in Egypt: the febrile markets

The Tokyo Stock Exchange finished Monday's session down 1.18% as investors worried the situation in Egypt and the rise of the yen. At the close, the Nikkei 225 index of blue chips lost 122.42 points to 10 237.92 points. The broader Topix index of all titles of the first table has in turn yielded 9.61 points (1.04%) to 910.08 points.

Business was sluggish, with 1.97 billion shares traded on the primary market. The day before, most exchanges of Arab Gulf countries, have plunged as a result of tensions in Egypt. At the Dubai Financial Market, DFM index closed down 4.32%, after opening down more than 6%. Other Gulf markets were also down.

The Abu Dhabi Stock Exchange lost 3.74%, before closing down 3.68%. In Kuwait, the stock market, the second Arab market after Saudi Arabia, has lost 2.14% during early trade, then finished down 1.76%. The Stock Exchange of Qatar has opened a drop of more than 5%, before recovering to finish with a loss of 2.95%, while those of Oman and Bahrain have lost respectively 3.02% and 1.43% .

The Saudi market, the largest in the Arab world, had yielded 6.43% Friday, where he was the only one open in the region. Sunday, he made an exception and has recovered some of its losses, closing up 2.47%. The Cairo Stock Exchange was closed Sunday after the suspension of trading on Thursday a plunge of 10%.

Disorders also have an impact on transit in the Suez Canal. Ships no longer find in the port of Suez military escorts able to protect them while crossing the Gulf of Aden, whose waters are crisscrossed by hackers. Merchant vessels continue to pass without delay or cancellation of the Suez Canal, a major transit point for the movement of crude oil and other imports to Europe.

But port operations are, themselves, slowed because of protests against President Hosni Mubarak. Half of the ships transiting the canal make a stopover in the port to refuel, replenish fuel, crew change and ship escorts to ensure their safety. The troubles in Egypt cause an increase in crude prices Monday in electronic trading in Asia, the market fearing disruptions in routing oil through the Suez Canal, analysts said.

In morning trading, a barrel of light sweet crude for March delivery gained 37 cents to 89.71 dollars. Of Brent North Sea with identical maturity appreciating by 18 cents to $ 99.60. "This price increase reflects the tensions in Egypt and the possibility that there could be trouble [at the offer] because of the Suez Canal," says Ben Westmore, an economist at the Australian bank NAB in Melbourne.

According to Tom Bentz of BNP Paribas, about one million barrels per day pass through the Suez Canal. "There is some nervousness about supply and this could affect Europe more than the U.S.," he said. Friday already tensions in Egypt have pushed up crude prices. On the New YorkMercantile Exchange (Nymex), a barrel of light sweet crude for March delivery ended Friday at 89.34 dollars, up 3.70 dollars or 4.32%.

In London, the Intercontinental Exchange, a barrel of Brent North Sea at the same maturity rose to 99.74 dollars, approaching the $ 100 threshold, he has crossed over from the 1 October 2008. He closed with a gain of 2.03 dollars to 99.42 dollars (2%).

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