DUBAI: Egypt’s stock market rose to a nine-week high yesterday as investors continued to bet that authorities would succeed in managing depreciation of the Egyptian pound smoothly. Most Gulf markets gained because of positive global sentiment.
The Egyptian index climbed 1.8 percent to its highest close since Oct. 30. It has risen for the last five sessions, partly because of foreign interest in the market; stock exchange data on Thursday showed foreign investors’ buying outweighing their selling by more than two to one.
The Egyptian pound slid further at the central bank’s auction of foreign currency, with $74.9m sold to banks at a cut-off price of 6.3860 pounds. The currency has lost more than 3 percent this week.
But most investors still appear to think the drop can be controlled, and that a cheaper currency could ultimately be positive for the economy
Shares in Ezz Steel, which as a major exporter could benefit considerably from a weaker pound, advanced 4.3 percent. Palm Hill Development Co, the country’s second biggest listed property developer, gained 1.2 percent. Orascom Telecom climbed 1.9 percent.
Meanwhile, Gulf markets took their cue from global markets, partly because of the resolution to the US tax talks and partly because of anticipation of healthy fourth-quarter earnings. Dubai’s index ended at a nine-month high, advancing 0.9 percent.
“We are expecting to see a strong performance on regional markets early in the year; we saw that GCC markets lagged international markets’ performance for 2012, except Dubai, so the rest of the markets should be playing catch-up in January,” said Marwan Shurrab, vice president and chief trader at Gulfmena Investments.
In Dubai, Emaar Properties gained 1.3 percent and Dubai Islamic Bank added 1.5 percent. However, mortgage lender Tamweel fell 2.5 percent as traders expect the firm to be affected by a UAE central bank decision to cap mortgage lending to 50 percent of property value for expatriates.
Executives from commercial banks operating in the UAE are expected to meet on Sunday to discuss their position on the mortgage caps, Al Khaleej newspaper reported on Thursday, citing an unnamed source.
The report said banks were inclining towards asking the central bank to raise the cap for first-time home buyers to 85 percent from 70 percent for UAE citizens, and to 75 percent from 50 percent for expatriates.
After the market closed, Dubai Islamic said its board had approved plans to fully acquire Tamweel, in which it already holds a majority stake of 58.2 percent.
Meanwhile, Abu Dhabi property developers Aldar Properties and Sorouh Real Estate climbed over 3 percent each, helping lift the Abu Dhabi index, which ended 0.3 percent higher. Aldar and Sorouh have announced that they are in advanced stages of talks on a merger, and investors are expecting a decision in the near future. reuters