The Egyptian Exchange’s (EGX) bullish start to the year has begun to wane. The benchmark, EGX30, fell 2.4 per cent on 21 February, to 5,030.75 points, the lowest in two months.

Mobinil, one of the largest listed stocks fell 1.9 per cent to £E171.86 ($28.48) after the mobile operator announced a fourth quarter loss of $29m in 2011 due to the ongoing civil unrest, taxes and increased competition. Yet the bourse is still the best performing in the region so far this year.

“We’re staring at a different sentiment in the market. There was a lot of pessimism and scepticism toward the end of last year. The market may be down, but it is definitely not out. What we hope to see is stability of trading volumes,” says Malek Kanawati, chief executive officer at regional brokerage firm Mubasher Financial Services.

The market capitalisation of the EGX grew 17.4 per cent from December 2011 to January this year to $57.16bn.

During January 2012, 400,225 transactions were completed with an average of 20,011 trades per day, higher than the 333,822 transactions and an average of 15,896 trades per day seen in December 2011.

Another exchange that has also enjoyed soaring levels is the Dubai Financial Market (DFM) which jumped 3.63 per cent at the start of the week on 19 February to 1,571.09 points after Sheikh Ahmed bin Saeed al-Maktoum, chairman of the Dubai Supreme Fiscal Committee announced that Dubai’s economy is expected to grow between 4.5 per cent to 5 per cent in 2012.

“The DFM index has perked up thanks mainly to local rather than international investors,” says Hasnain Malik, managing director at US-based Citi Investment Research of the Middle East & North Africa (Mena). Other contributors have been “a ‘risk-on’ context globally, cheap valuations and the catalyst of better than expected results from Emaar,” says Malik.

Property developer Emaar gained 3.85 per cent at the start of the week to AED2.97 ($0.81) and eventually reached an eight-month high on 21 February to close at AED3.07. Islamic property developer Deyaar also gained this week closing 1.9 per cent higher on 20 February buoyed by increased interest in the UAE’s construction market. According to the Dubai International Financial Centre Authority (DIFC), the UAE has the GCC’s largest share of the $1 trillion construction projects to be completed by 2020, valued at $636bn.

Citi’s bright outlook for the DFM at the beginning of the year was met with scepticism says Malik, but investors are now becoming more sympathetic to this view.

Elsewhere in the region, the Kuwait Stock Exchange (KSE) closed on a five-month high on 20 February at 6,114.7 points. The main index dipped slightly on 21 February by 0.27 per cent although it still managed to close above the 6,000 mark at 6,098.2 points.