Currency fears weigh on stocks in Egypt

Egypt’s stock index fell 1.2 per cent to 14,447 points yesterday because of concerns that its currency could be vulnerable, while Saudi Arabia and the UAE markets rose, buoyed in part by high oil prices.

Twenty-five of the 30 stocks in Egypt’s blue-chip index fell, as Egypt underperformed MSCI’s emerging markets index, which was almost flat.

Middle East fund managers have turned negative towards Egyptian equities because of concern that the currency could weaken as global interest rates rise and foreign investors cut holdings of Egyptian Treasury bills, a Reuters poll showed.

Thirty-one per cent of managers now expect to cut allocations to Egyptian equities and only 8 per cent to raise them in the next three months, the most negative balance for Egypt since February 2017.

The Saudi index rose 0.5 per cent to 8,038 points, lifted by banks and petrochemical stocks. National Commercial Bank jumped 2.6 per cent and Sahara Petrochemical added 1.3 per cent.

Alinma Investment, a unit of Alinma Bank, signed an agreement with Saudi Real Estate to establish a real estate fund that will develop three sites in Riyadh with a value of 1.5 billion riyals. Saudi Real Estate rose 0.9 per cent and Alinma Bank was up 1.3 per cent.

The Dubai index gained 0.5 per cent to 2,850 points on the back of a 2.4 per cent rise by Emaar Properties, which in the past couple of weeks has been recovering from 30month lows.

Construction firm Drake & Scull rose 2.6 per cent; the loss-making company postponed last Thursday’s shareholder meeting to discuss its future this Thursday, citing the lack of a quorum.

Abu Dhabi’s index closed 0.9 per cent higher to 4,980 points as First Abu Dhabi Bank rose 2.1 per cent. Invest Bank added 6.4 per cent – sources told Reuters last week that the Sharjah government was considering a possible merger of Bank of Sharjah, Invest Bank and United Arab Bank.

The Bahrain index fell 0.3 per cent to 1,335 points, with Khaleeji Commercial Bank plunging 8.9 per cent after it announced the resignation of its chief financial officer.

In Kuwait the index dropped 0.3 percent to 5,329 points. In Oman the index dipped 0.1 percent to 4,538 points.