Egypt sotcks hit 5-year high on poll law talk
Dubai, February 18, 2014
Egypt's bourse surged to a five-year high after a local newspaper reported that discussions over a new presidential election law would begin on Wednesday, while Dubai's shares fell in profit-taking after mixed earnings reports.
Cairo's Al-Ahram said an administrative court, under the mandate of the 2014 constitution, would start discussions on the draft law. It may also give details of potential presidential candidates and the timeframe of the elections.
"People are excited about the elections, they are building positions in anticipation of presidential election law," said Mohamed Radwan, director of international sales at Pharos Securities in Cairo.
Construction- and property-related shares led the trading. Palm Hills Development Co rose 3.9 percent and Egyptian Resorts jumped 4.7 percent.
Cairo's benchmark index rose 1.9 percent to 7,721 points, its highest level since September 2008. It broke above the April 2010 intraday peak of 7,693 points but will need a weekly close above the level to confirm a breakout from the resistance.
The market was little affected by Sunday's bombing of a tourist bus in Sinai and this resilience is also supporting investor confidence, Radwan added.
In Dubai, shares in Air Arabia tumbled 4.8 percent to a two-week low after the budget carrier posted a profit of 94 million dirhams, which came in slightly below estimates. It also proposed a 7.25 percent cash dividend that's only marginally above the previous year's 7 percent dividend.
"Investors were expecting higher dividends on Air Arabia and this is a market that looks for dividends," said Ali Adou, portfolio manager at The National Investor.
Telecommunications operator Du dropped 5.6 percent, despite posting estimate-beating earnings.
Du's fourth-quarter profit fell to 570 million dirhams from 994 million dirhams a year earlier when the company wrote back some tax provisions.
Builder Arabtec Holding fell 2.4 percent after brokerage EFG Hermes cut the stock's rating to 'sell' citing concerns about the firm's ability to increase execution significantly after building up a large project backlog.
Emaar Properties escaped the selling pressure and rose 3.4 percent to its highest level since September 2008 after it posted a 48 percent surge in quarterly profit, handily beating estimates.
Dubai's index lost 1.1 percent, slipping off Monday's five-year high.
"The overall market has had a nice run but fundamentally, it's becoming overstretched. Fresh money won't come in if valuations are high," Adou said.
Analysts and investors have been calling for a correction on Dubai's market with heavy retail activity spurring small-cap stocks in speculative buying.
Elsewhere, Qatar's measure slipped 0.3 percent, also slipping off Monday's five-year high.
Saudi Arabia's index climbed 0.2 percent. Banking shares supported gains with the sector's index up 0.3 percent.
EGYPT: The index rose 1.9 percent to 7,721 points.
DUBAI: The index fell 1.1 percent to 4,177 points.
QATAR: The index slipped 0.3 percent to 11,690 points.
SAUDI ARABIA: The index gained 0.2 percent to 8,957 points.
ABU DHABI: The index slipped 0.2 percent to 4,870 points.
OMAN: The index gained 0.1 percent to 7,160 points.
KUWAIT: The index climbed 0.2 percent to 7,808 points.
BAHRAIN: The index rose 1.1 percent to 1,347 points. - Reuters