MIDEAST STOCKS-Egypt rises in post-devaluation rally; Gulf falls with oil – Reuters

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* Egyptian shares rise a second day after devaluation

* But trading volume almost halves

* Real estate gains, exporters strong

* Broad sell-off in Saudi stocks

* Ex-dividend FGB is main drag on Abu Dhabi

By Celine Aswad

DUBAI, March 15 Egypt’s stock market rose for a
second straight day on Tuesday after the country’s central bank
devalued the currency. Gulf markets fell as oil prices

Cairo’s index climbed 1.9 percent to 7,140 points,
rising above technical resistance at this year’s peak of 7,114
points. A second straight close above that level would confirm a
break, pointing up to the October peaks around 7,700 pounds.

But while trading volume was active, it almost halved from
the extraordinarily high seen on Monday, when the index soared
6.7 percent after the central bank devalued the pound to 8.85
per U.S. dollar from 7.73.

The devaluation raised hopes that a cheaper pound would
attract more capital to Egypt and eventually resolve its endemic
foreign exchange shortage.

Prime Investment Research argued in a report that hard
currency inflows due to the devaluation, especially from foreign
direct investment and tourism, would boost Egypt’s net foreign
reserves to $24 billion by 2020, from about $16.5 billion now.
It noted that a previous devaluation in 2003 was followed by a
sharp rise in reserves.

But it added that the devaluation was unlikely to lead to an
export boom, partly because of weakness in Egyptian export
markets in the Middle East.

Furthermore, many analysts expect the currency to slide
further this year, a prospect which could delay hoped-for
capital inflows, while interest rates could be hiked as soon as
on Thursday to fight increased inflation due to the weak

El Sewedy Electric jumped 3.6 percent after it
reported that it earned 1.351 billion Egyptian pounds ($153
million) in 2015 versus 445 million pounds a year earlier.
Juhayna Food, another exporter, rocketed 9.1 percent.

Real estate shares, which could be bought as a hedge against
inflation fuelled by the devaluation, faired well; Talaat
Mostafa jumped 9.8 percent.

But some blue chips fell after rising strongly on Monday.
They included Commercial International Bank, which
fell 0.8 percent after a 6.8 percent gain on the previous day.


Meanwhile, Brent oil futures edged down below $39 a
barrel on Tuesday, igniting a broad sell-off in Gulf stock

The petrochemical sector was the main drag as Riyadh’s index
, falling 0.9 percent to 6,233 points. Saudi Basic
Industries, the largest listed petrochemical producer,
dropped 1.0 percent.

But construction company Khodari added 1.7 percent
after it announced that it had received 9.1 million riyals ($2.4
million) as compensation from the state’s Human Resource
Development Fund for the impact of labour reforms. The gain will
be booked in the first quarter of 2016, the company said.

Saudi Arabia’s government is opening a fresh austerity drive
by ordering ministries to cut their spending on contracts by at
least 5 percent, a document seen by Reuters shows. The cuts
could further slow economic growth and hurt the construction
industry, where many companies are struggling with deteriorating
cash flow and rising labour costs.

Profit-taking by local traders in speculative shares pulled
Dubai’s index down 0.9 percent. Builders Arabtec
and Drake & Scull each dropped more than 6.0
percent, while Dubai Parks tumbled 2.9 percent. All
three shares, favoured by local traders, had risen more than 16
percent since mid-February.

Abu Dhabi’s benchmark dropped 2.1 percent as the
largest listed bank on the exchange, First Gulf Bank,
traded ex-dividend; it fell 9.8 percent.

Other blue chips also sold off; Union National Bank
, which went ex-dividend on March 10, fell 5.0 percent.
Last month, the lender announced that it had trimmed its 2015
cash dividend from the prior year.

In Qatar, the index fell 1.1 percent; Qatar Gas
Transport and drilling rig provider Gulf International
Services declined 6.5 and 4.9 percent respectively.
The largest listed bank by market value, Qatar National Bank
, fell 1.4 percent.



* The index jumped 1.9 percent to 7,139 points.


* The index fell 0.9 percent to 6,233 points.


* The index dropped 0.9 percent to 3,322 points.


* The index declined 2.1 percent to 4,403 points.


* The index fell 1.1 percent to 10,200 points.


* The index added 0.1 percent to 5,244 points.


* The index edged down 0.03 percent to 5,296 points.


* The index rose 0.4 percent to 1,156 points.

(Editing by Andrew Torchia, Larry King)

MIDEAST STOCKS-Egypt rises in post-devaluation rally; Gulf falls with oil – Reuters}