MIDEAST STOCK MAR­KETS

Kuwait Times - - BUSINESS -

Profit-tak­ing hit stocks in Egypt and Saudi Ara­bia yes­ter­day fol­low­ing strong ral­lies in both mar­kets, while gen­eral weak­ness in emerg­ing mar­kets dragged down the United Arab Emi­rates and Qatar.

Cairo’s blue chip in­dex, which had soared 28.1 per­cent since the Egyp­tian pound was floated on Nov. 3, fell 2.0 per­cent end­ing 12 con­sec­u­tive ses­sions of gains. The broader EGX100 in­dex dropped 0.8 per­cent. Ex­change data showed nonArab for­eign in­vestors re­mained net buy­ers of stocks to the tune of about $6.7 mil­lion, a smaller amount than in pre­vi­ous days.

Many Egyp­tian blue chips surged af­ter the pound’s float partly be­cause the de­pre­ci­a­tion of cur­rency meant com­pa­nies’ dol­lar-de­nom­i­nated global de­posi­tary re­ceipts were sud­denly worth much more in lo­cal cur­rency. But that ef­fect now ap­pears to have largely run its course. The Cairo-listed shares of Com­mer­cial In­ter­na­tional Bank , for ex­am­ple, fell 3.9 per­cent to 66.60 Egyp­tian pounds. At $4.26, its GDRs were worth 67.10 pounds at an ex­change rate of 15.75 pounds to the dol­lar.

Saudi Ara­bia’s in­dex slipped 0.5 per­cent, end­ing seven con­sec­u­tive ses­sions of gains in the heav­i­est trad­ing vol­umes since April. Petro­chem­i­cal shares lost their foot­ing as Brent fu­tures fell be­low $44.50 a bar­rel, head­ing for their low­est set­tle­ment since Au­gust. Heavy­weight producer Saudi Ba­sic In­dus­tries fell 0.6 per­cent.

The bank­ing sec­tor was mixed as Saudi cen­tral bank of­fi­cials told a news con­fer­ence that they wanted money rates to fall fur­ther, eas­ing a liq­uid­ity squeeze in the sec­tor. They in­di­cated that more fund in­flows into the bank­ing sys­tem were ex­pected.

Cur­ren­cies from the Mex­i­can peso to the Malaysian ring­git fell yes­ter­day as the US dol­lar soared to an 11-month peak. But in the Gulf, for­eign ex­change pegs mean for­eign in­vestors do not have to worry about cur­rency de­pre­ci­a­tion against the US dol­lar.

Nev­er­the­less, Dubai’s main in­dex lost 0.9 as builder Arabtec dropped 2.3 per­cent. The com­pany re­ported a nar­rower quar­terly loss of 225.5 mil­lion dirhams ($61.4 mil­lion) com­pared with a 944.8 mil­lion loss in the same pe­riod of last year. In­dex com­piler MSCI is due to an­nounce the re­sults of its semi-an­nual in­dex re­view at the end of the day. VTB Cap­i­tal said in a note that it es­ti­mated an 80 per­cent prob­a­bil­ity that DXB En­ter­tain­ments would re­place Arabtec in MSCI’s emerg­ing mar­ket in­dex. Shares in the amuse­ment park builder closed down 0.7 per­cent.

VTB Cap­i­tal also ex­pects Dubai Fi­nan­cial Mar­ket, the only listed Gulf ex­change, to be ex­cluded from the in­dex. Its shares dropped 1.8 per­cent. But Air Ara­bia climbed 2.4 per­cent af­ter it re­ported a 26 per­cent rise in third-quar­ter net profit to 297 mil­lion dirhams, at the up­per end of an­a­lysts’ fore­casts.

Sim­i­larly, Abu Dhabi’s in­dex fell for a fourth straight ses­sion, clos­ing 1.2 per­cent down. MSCI emerg­ing mar­ket in­dex com­po­nent Eti­salat lost 2.3 per­cent.

In Qatar, the in­dex slipped 1.3 per­cent in mod­est vol­ume to a fresh five-month low. Twelve of the 13 shares that are mem­bers of the MSCI emerg­ing mar­ket in­dex fell, with Qatar Nav­i­ga­tion los­ing 3.5 per­cent. —Reuters

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