UPDATE 2-MIDEAST STOCKS-Saudi Arabia slips, Egypt pulls back after rally

(Updates with Saudi Arabia, Egypt open)

DUBAI, May 6 (Reuters) – Saudi Arabia’s stock market slipped in early trade on Wednesday despite strong oil prices after Yemen’s Houthis attacked a town in the kingdom for the first time, while Egypt’s rally slowed.

The main Saudi index inched down 0.1 percent as blue chips Saudi Basic Industries and Saudi Telecom fell 0.9 and 2.8 percent respectively.

Yemen’s Houthi fighters fired mortar and rockets at a Saudi Arabian border town on Tuesday for the first time since a Saudi-led coalition began a military campaign against them in late March.

The attack followed Monday’s statement by Riyadh that it was considering a ceasefire to allow humanitarian relief and a call by President Abd-Rabbu Mansour Hadi, in exile in Saudi Arabia, for talks among Yemen’s political factions.

Also, a decision by Saudi Arabia’s securities regulator to press ahead with imposing strict limits on direct foreign investment in the stock market, announced this week, may have disappointed investors who had hoped to see heavy inflows when the market opens to the first wave of foreign funds next month.

Egypt’s market edged down 0.3 percent, having gained 3.1 percent in the two previous sessions on positive economic data and hopes that the central bank would address shortages of foreign currency.

Emaar Misr, a local unit of Dubai developer Emaar Properties, took a step towards starting its public offer on Tuesday, saying its board had recommended to shareholders that the developer offer 600 million shares on the Cairo bourse to raise 2.8 billion Egyptian pounds ($367 million). The offer may prompt some investors to sell other stocks in order to free up cash for the IPO. (Reporting by Olzhas Auyezov; Editing by Andrew Torchia)

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