Gulf falls; Saudi out­per­forms; in­vest­ment steps boost Egypt

Kuwait Times - - BUSINESS -

Gulf stock mar­kets fell yes­ter­day after drops in global bourses and oil prices, but bank­ing shares lim­ited the de­cline in Saudi Ara­bia. Egypt’s blue chip in­dex rose after the gov­ern­ment ap­proved steps de­signed to boost in­vest­ment. In the nine days through Mon­day, the Saudi in­dex rock­eted 10.1 per­cent in re­sponse to the suc­cess of Riyadh’s in­ter­na­tional bond is­sue, which eased con­cern about tight liq­uid­ity in the bank­ing sys­tem.

On Tues­day, the in­dex pulled back slightly, and it fell a fur­ther 0.1 per­cent yes­ter­day. The bank­ing sec­tor edged up 0.04 per­cent, sug­gest­ing pos­i­tive sen­ti­ment due to the bond is­sue has not yet faded. The big­gest lender, Na­tional Com­mer­cial Bank, fell back 3.2 per­cent but ma­jor Is­lamic lender Al Ra­jhi climbed 0.9 per­cent.

The petro­chem­i­cal sec­tor dropped 0.5 per­cent, and many gain­ers were se­cond- or thirdtier stocks fa­vored by lo­cal re­tail in­vestors, such as air con­di­tioner maker and re­tailer Shaker, which rose 1.5 per­cent after its board ap­proved a 0.75 riyal nine-month div­i­dend to share­hold­ers reg­is­tered this to­day. Dubai’s in­dex fell 0.9 per­cent with Emaar Prop­er­ties los­ing 1.6 per­cent, while a 1.6 per­cent slide in telecom­mu­ni­ca­tions op­er­a­tor Eti­salat helped to pull Abu Dhabi’s in­dex down 1.0 per­cent. Qatar’s in­dex slipped 1.3 per­cent to 10,073 points as petro­chem­i­cals and met­als blue chip In­dus­tries Qatar sagged 1.6 per­cent.

The in­dex broke tech­ni­cal sup­port at 10,153-10,160 points, where its Septem­ber low co­in­cided with its 200-day av­er­age. That broke the con­sol­i­da­tion range of the past six weeks, point­ing down to around 9,800 points. A Reuters poll of Mid­dle East fund man­agers pub­lished this week found only 7 per­cent of man­agers ex­pected to raise Qatar eq­uity al­lo­ca­tions in the next three months, and 50 per­cent ex­pected to re­duce them - the most bear­ish bal­ance for Qatar since the sur­vey was launched in Septem­ber 2013. They cited high valu­a­tions rel­a­tive to the rest of the re­gion.

Kuwait’s stock in­dex edged down 0.1 per­cent but Kuwait Fi­nance House, the coun­try’s big­gest Is­lamic lender, rose 2.1 per­cent after re­port­ing a 20.5 per­cent rise in third-quar­ter net profit to 52.3 mil­lion di­nars ($172.9 mil­lion). EFG Her­mes had fore­cast the lender would make a quar­terly net profit of 33.8 mil­lion di­nars while HSBC had es­ti­mated 64.0 mil­lion di­nars. In Egypt, the EGX 30 in­dex of blue chips rose 0.9 per­cent, with Global Tele­com adding 2.5 per­cent and real es­tate de­vel­oper Talaat Mostafa gain­ing 1.2 per­cent. How­ever, the broader EGX 100 in­dex fell 0.9 per­cent. The gov­ern­ment’s Supreme In­vest­ment Coun­cil on Tues­day ex­tended a freeze on cap­i­tal gains tax from shares for three years.

Other steps in­cluded tax ex­emp­tions for farm­ers and man­u­fac­tur­ers who pro­duce strate­gic crops or goods that Egypt im­ports or ex­ports, and mea­sures to re­duce le­gal and bu­reau­cratic bar­ri­ers to in­vest­ment. The steps ap­peared un­likely in them­selves to re­solve Egypt’s se­vere for­eign cur­rency short­age or boost growth any time soon, but they were seen as a pos­i­tive sig­nal that the gov­ern­ment had the mar­ket’s in­ter­ests in mind, said a lo­cal fund man­ager. — Reuters

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