Most stock markets in the Gulf declined on Monday as retail investors booked profits in Dubai, Abu Dhabi and Qatar after strong gains lifted those bourses to multi-year peaks earlier this month.
The three markets are the top performers in the region: Dubai has gained 51 per cent, Abu Dhabi is up 19 per cent and Qatar has added 22 per cent.
"Given the run-up year-to-date, it is natural to see them (retail investors) book a little bit of profit," said Amer Khan, senior executive at Shuaa Asset Management.
Also, all three markets have been boosted by expectations of increased foreign investment since index compiler MSCI said last June it would upgrade them to emerging market status at the end of May 2014.
But, citing limits on foreign ownership, MSCI told clients at the end of last week that it would cut by half the index weightings of four major stocks from each country. This will reduce passive fund inflows associated with the upgrade — although they were expected to be modest in any case.
Dubai's bourse slid 0.8 per cent on Monday. Dubai Islamic Bank, down 2.2 per cent, was the main drag. The lender is due to publish its first-quarter results in coming days.
Shares in construction firm Arabtec Holding edged down 0.7 per cent as trading volume decreased after it hit an all-time closing high of Dh8.99 on Sunday. The stock has gained 49 per cent this month.
In Abu Dhabi, the index slipped 1.2 per cent, pulled down by large lenders such as Abu Dhabi Commercial Bank and First Gulf Bank, which fell 2.5 per cent and two per cent, respectively.
The Doha benchmark fell 1.3 per cent, largely due to Industries Qatar which posted a 38 per cent drop in first-quarter net profit on Sunday, trailing analysts' forecasts.
Egypt's bourse declined one per cent, down for a second session in a row after closing at a three-week high last Wednesday. Property developer Talaat Moustafa Group was the main drag, dropping 3.1 per cent as its shares stopped carrying the 2013 dividend on Monday.