Egypt tumbles on energy woes; most Gulf bourses rise

4 Min Read

By Patrick Werr and Nadia Saleem / Reuters

CAIRO/DUBAI: Egypt’s bourse made its largest single-day loss in four months as fresh political tensions, gasoline shortages and a transport strike hurt investor sentiment, while most other Gulf indices rose thanks to upbeat global markets.

Cairo’s benchmark index slumped 3.6 percent, the most it has fallen since November 22, 2011, with all major stocks in the index declining.

Long queues began snaking outside of petrol stations late last week and continued over the weekend, drivers say. Energy analysts said the government is finding it increasingly hard to come up with the foreign currency it needs to import gasoline.

“The gasoline crisis, the transport crisis. They’re all making the market go down,” said Hisham Metwalli of Arab Finance Brokerage.

A dispute between Egypt’s military council and the Muslim Brotherhood has also heightened market jitters, said Ashraf Akhnoukh of CICB Brokerage.

Ezz Steel plunged 9.9 percent and Palm Hills 9.5 percent, while Orascom Telecom dropped 4.9 percent and Orascom Telecom Media and Technology fell 5.6 percent.

In Saudi Arabia, banks helped the index up 1.1 percent to close at 7,759 points, a fresh three-and-half-year high. Analysts expect the kingdom’s financial sector to lift the market further, backed by strong fundamentals.

“The index is approaching a resistance between the 7,800 and 8,000 points range,” said Mateb Al Ghanim, portfolio manager at Amlakuna Investment Group. Strong support is seen between 6,900 and 7,200 points, with buying opportunities in banking stocks supporting gains, he added.

Heavyweight Al Rajhi Bank gained 2.2 percent, Samba Financial Group climbed 3.4 percent and Banque Saudi Fransi rose 2.2 percent.

“Banks have strong fundamentals and when the numbers are released for the first quarter, they will reiterate recent gains,” said Ahmed Raza Khan, head of research, asset management at Mefic Capital.

Saudi Arabia’s Etihad Atheeb Telecom jumped 9.9 percent, extending gains from a day earlier when it resumed trade following a 10-month suspension.

The company received approval to resume trading after it announced plans for a capital increase. The company will raise its capital from 400 million riyals ($106.66 million) to 1.56 billion riyals.

Dubai’s bourse rose for a third session, up 0.5 percent. Developer Deyaar jumped 12.3 percent, Dubai Islamic Bank rose 0.9 percent and telecoms operator du climbed 1.3 percent.

“Retail-focused stocks are highly traded currently and the rest of the market is stable and consolidating,” said Marwan Shurrab, vice-president and chief trader at Gulfmena Investments.

Abu Dhabi’s benchmark gained 0.8 percent, up from Thursday’s two-week closing low.

“We’re taking the lead from international markets and the focus is on the trend for 2012 – whether this will be the year of recovery or whether financial markets will struggle to recover the losses of the last two years,” Shurrab said.

Investors are likely to cut their risk exposure in the coming sessions following the UAE’s early-year rally, he added.

Dubai’s index is up 23.3 percent so far in 2012.

Elsewhere, Doha’s benchmark rose 0.7 percent to its highest close since March 5. Gainers outnumbered losers 14 to one.

Industries Qatar and Qatar Electricity and Water led gains, up 1.8 ad 2.5 percent respectively.

Qatar Navigation, renamed to Milaha, climbed 1.6 percent after proposing a cash dividend of 3.5 riyals ($0.96) per share, according to a bourse statement.

Share This Article
Leave a comment