Sunday 9 August 2020

Bourses join global market rout; Egypt tumbles 2.8pc

DUBAI, February 9, 2016

Stock markets in the Middle East fell on Tuesday, erasing the prior session's gains, as risk appetite diminished following a slump in global shares.

Egypt's main index tumbled 2.8 per cent to 6,004 points, erasing the prior session's gains as foreign funds redeemed shares, bourse data showed.

Commercial International Bank, a stock favoured by international fund managers, retreated 3.3 per cent. Palm Hills Development declined 4.3 per cent in heavy trade, after the real estate developer posted strong quarterly earnings early this week.

Egypt's central bank has been striving to maintain stability in the currency over the past several months, but foreign investors are still jittery about the possibility of a devaluation and the negative impact it would have on their investment returns and companies' earnings.

Sources told Reuters on Monday that General Motors had temporarily suspended its operations in Cairo because of the hard currency shortage - a sign of how serious the country's economic slump remains.

Riyadh's index fell 0.5 per cent to 5,874 points, after briefly trading in positive territory, as local traders cashed out of small and mid-cap stocks, which had helped lift the index 0.2 per cent on Monday.

"It's a stock picker's market at this point," said a Jeddah-based stock broker. "Traders are buying speculative stocks to book a quick profit and either cash out or rotate into the blue- chips."

The majority of speculative insurance stocks retreated, with Al Sagr Cooperative Insurance slumping 4.4 per cent after it had jumped 8.1 per cent the previous day.

Dubai's index dropped one per cent to 3,065 points, but closed 42 points above its intra-day low. Blue-chip stocks were the main drag on the bourse, with Emirates NBD, the largest lender by assets, tumbling 4.5 per cent.

But some small and mid-cap stocks favoured by local retail investors rose, with Damac Properties adding 4.8 per cent, after falling by as much as 2.0 per cent in early trade. Drake & Scull, a construction firm, added 1.2 per cent.

In Abu Dhabi, the benchmark also fell 1.0 per cent, weighed down by a sell-off in large-cap banks. Abu Dhabi Commercial Bank fell 3.4 per cent and National Bank of Abu Dhabi lost 2.1 per cent.

United Arab Emirates stock markets, however, have recovered in recent weeks from multi-year lows hit in mid-January. Abu Dhabi and Dubai, down 5.7 and 2.7 per cent respectively in 2016, have outperformed both their regional peers and crude oil prices this year.

"Generally, better-than-expected results from banks and the recommended cash dividends companies are willing to distribute have helped UAE equities outperform in 2016," said a note by Abu Dhabi's NBAD Securities.

Both bourses are expected to continue faring better than their peers at least until March, when investors' attention will shift to first-quarter earnings, the note added.

Kuwait Food Co (Americana) jumped 4.6 per cent after rocketing 10.0 per cent on Monday. The food company said its board had agreed to give a Gulf-based investment firm 60 days to carry out due diligence for the acquisition of a controlling stake in the company. Kuwait's main index fell 0.9 per cent.

Qatar's bourse was closed for a public holiday.-Reuters

Tags: Egypt | bourse |

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