Egypt index soars to new high
Cairo, May 29, 2011
Egypt's benchmark share index on Sunday reached its highest close since April 3 after Friday protests calling for a "second revolution" passed off without major violence, bolstering confidence in the country's security, traders said.
Thousands of Egyptians packed Cairo's Tahrir Square to push for faster reforms and a speedy trial of ousted President Hosni Mubarak, who stands accused of the killing of protesters and abuse of power. He has denied the charges.
"We had fears something fierce would happen on Friday and nothing happened in terms of violence. Investors see it was smooth," remarked Omar Ascar of Cairo Capital Securities.
Traders said optimism that the government will resolve land bank issues in the real estate sector were also boosting investor interest. The index closed up 2.5 per cent at 5,548 points.
"Investors feel that there will be no further withdrawals in land and that government penalties will only be on owners of the companies", and not their other shareholders, noted Hashem Ghoneim, vice chairman of Pyramids Capital.
The country's biggest real estate firm Talaat Moustafa was the bourse's second most active stock with more than 43.7 million Egyptian pounds ($7.35 million) worth of its shares traded. It soared 9.9 per cent.
Egypt's second-biggest developer, Palm Hills gained 9.7 per cent and was among the top five most traded stocks on the bourse, with over 31.9 million pounds worth of its shares changing hands.
Other real estate firms Egyptian Resorts and Sodic rose 9.7 per cent and 7.7 per cent respectively.
Traders also said funds likely to pour into Egypt from global institutions such as the World Bank and International Monetary Fund (IMF), as well as from Gulf states like Qatar, have boosted investor confidence, particularly in finance stocks.
"With all this money pumped into Egypt from the World Bank, the IMF and Qatar, investors see a return to normal lending cycles for upcoming projects," Ghoneim observed.
Commercial International Bank (CIB), Egypt's biggest private bank by assets, was the bourse's most active stock with over 81.6 million pounds worth of its shares traded. It gained 2.3 per cent.
Egyptian investment bank EFG-Hermes is among the index's top ten gainers, closing up 6 per cent.
Saudi Arabia's index edged up to a fresh four-month high as agriculture and construction stocks support. The agriculture and food index rose 0.8 per cent and the building and construction benchmark added 1.5 per cent.
Domestic demand drove these sectors and so they were often targeted as safe havens when global markets were shaky.
Tabuk Agriculture surged 9.8 percent. "Bluechips are stable but liquidity is not going to the large cap stocks in Saudi," revealed a Riyadh-based fund manager on terms of anonymity.
"Liquidity is moving from sector to sector - its more speculation with high turnover." The main index edged up 0.05 per cent to 6,755 points, rising for a fourth session to reach its highest close since January 17.
In Oman, the Muscat's index neared a 22-month low. Renaissance Services fell for a third day, dropping 3.7 per cent.
Company officials met with analysts on Tuesday and issued a bleak outlook for 2011, according to analysts, with some expecting the company to cancel a planned listing of its unit Topaz, which was postponed in March.
Muscat's benchmark dropped 0.5 per cent to end at 5,953 points, its lowest close since July 2009.
"We expect the index to stabilise at current levels, as the (technical) indicators are positive," says Osama Ibrahim al-Qinna, head of brokerage at Oman Arab Bank.
"Although investors remain cautious in this volatile environment, we have noticed that market volumes are strongly supported by bluechip stocks."
Oman Telecommunications Company (Omantel) climbed 2.1 per cent and National Bank of Oman added 0.6 per cent, but Bank Muscat slipped 0.1 per cent and Galfar Engineering tumbled 4.4 per cent.
Meanwhile, in the UAE, construction and property stocks led Dubai's index to a higher close on Sunday.
Emaar Properties gained 2 per cent after its Saudi affiliate Emaar Economic City received $1.33 billion loan from the kingdom's finance ministry to speed up construction of a project.
Contractor Arabtec, which is active in Saudi Arabia, climbed 3.2 per cent. Dubai's benchmark gained 0.7 per cent to close at 1,545 points, rising for a second session since Wednesday's two-month low.
Abu Dhabi' s benchmark rose 0.4 per cent to 2,608 points, rallying after slumping to a seven-week intraday low in early trade. Aldar Properties led by volumes and rose 2.2 per cent, while Sorouh Real Estate gained 1.6 per cent.
Abu Dhabi Commercial Bank climbed 2.6 per cent, rising from Thursday's month-low, when it converted Dh4.8 billion ($1.31 billion) bonds issued in 2008 into 785.6 million shares, raising its capital level.-Reuters