Banks drive gains for Egypt’s blue chips

A rebound in bank shares lifted Egypt’s blue-chip stock index yesterday, while petrochemicals boosted Saudi Arabia’s index.

The Egyptian blue-chip index was up 1.7 per cent to 13,215 points – about twice the rise of the broader EGX100 index – as the biggest bank, Commercial International Bank (Comi), increased 3.5 per cent.

The market has suffered sharp corrections since May and that has taken a lot of stocks to attractive entry points, said Radwa El Swaify, head of research at Pharos Holding in Cairo.

Comi, along with other banks, had tumbled in recent weeks on concerns over an official proposal for higher taxation of their Treasury holdings. The final decision on the tax changes is not out yet and the proposal may be modified; this has allowed a recovery in bank stocks, though they have not returned to levels reached before news of the proposal, Ms El-Swaify said.

The Saudi Arabian index rose 0.8 per cent to 7,968 points with top petchems maker Saudi Basic Industries adding 2.3 per cent and the largest lender, National Commercial Bank, gaining 2 per cent.

Saudi Telecom climbed 3.2 per cent to 90.5 riyals after it announced its dividend policy for the next three years; it will pay a minimum of 1 riyal per share each quarter, and an additional 2 riyals as an annual dividend for 2018.

Arqaam Capital rated the stock a “core buy” and raised its target price to 103 riyals.

But another telecommunications company, Etihad Etisalat (Mobily), was down 4.3 per cent at 17.20 riyals, continuing to drop after disclosing a new system of royalty payments to the government on Sunday. Arqaam Capital downgraded the stock to “sell” from “hold” and cut its target to 16 riyals.

The Abu Dhabi index rose 0.7 per cent to 4,866 points with First Abu Dhabi Bank, United Arab Emirates’ largest lender, increasing 1.2 per cent and energy firm Dana Gas climbing 2.3 per cent.

In Dubai, the index inched up 0.3 per cent to 2,564 points after sliding 1.6 per cent in the last session, with Damac Properties gaining 4.8 per cent and blue chip Emaar Properties adding 2.4 per cent.

In Kuwait the index was flat at 5,402 points and Bahrain’s index was also flat at 1,319 points. The Omani index was down 0.2 per cent to 4,408.