Reuters – 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% and Egyptian Resorts jumped 4.7%.
Cairo’s benchmark index rose 1.9% 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% to a two-week low after the budget carrier posted a profit of AED 94m, which came in slightly below estimates. It also proposed a 7.25% cash dividend that’s only marginally above the previous year’s 7% 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%, despite posting estimate-beating earnings.
Du’s fourth-quarter profit fell to AED 570m from AED 994m a year earlier when the company wrote back some tax provisions.
Builder Arabtec Holding fell 2.4% 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% to its highest level since September 2008 after it posted a 48% surge in quarterly profit, handily beating estimates.
Dubai’s index lost 1.1%, 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.