Egypt falls to 4-wk low on political concerns

Most Gulf markets decline; Abu Dhabi ticks up

DUBAI, Feb 25, (RTRS): Egypt’s bourse extended declines to hit a near four-week low on Monday as political concerns continued to weigh on sentiment, with most Gulf markets also declining.

Market sentiment in Cairo remained downbeat on uncertainty ahead of parliamentary elections set for April 22.

President Mohamed Morsi invited opposition parties for talks on the election. Many political leaders have threatened to boycott the poll, triggering investor concern on the wide rift between the Islamist government and the opposition.

Heavyweights Commercial International Bank and Telecom Egypt lost 0.2 and 1.1 percent respectively.

Cairo’s index fell 0.6 percent to 5,548 points, its lowest close since Jan 30.

It rallied 25.6 percent from late November to early January and declined in recent sessions as political unrest escalated.

“The market is currently testing its 61.8 percent Fibonacci Retracement (FR) level, relative to the latest upward leg,” AbdelRahman Metwalli, senior technical analyst at Pharos Holding, said in a note. FR are commonly used technical levels by analysts and traders to gauge support and resistance levels.

“A clear breakout to the resistance levels (of 5,900) is our awaited clearcut signal for the resumption of the current intact medium-term uptrend,” he added.

In the UAE, Dubai’s index slipped 0.1 percent, easing away from Sunday’s 39-month high.

National Central Cooling (Tabreed) was the main drag, falling 4.7 percent to a one-week low but is still up 33 percent year-to-date. Investors booked profit in the stock after the firm proposed to pay a 5 fils per share dividend to shareholders and said it will issue more convertible bonds to its key shareholder Mubadala.

Analysts say investors are taking profits off the table after the convertible bonds news, which increases the risk of share price dilution upon conversion to equity.

“The 5 fils dividend was a pleasant surprise but the stock has been heavily traded recently and investors are selling on fact,” said an Abu Dhabibased trader who asked not to be identified.

“There’s probably more speculation to come - people love trading this stock — but there is the concern Tabreed will be privatised.”

Mubadala owns 27.3 percent in Tabreed, aside from the convertible bonds it holds in the district cooling firm.

Emaar Properties rose 0.6 percent to close at a fresh 51-month high ahead of a dividends announcement. Investors are expecting a higher payout than the 10 fils per share paid in the last two years.

Abu Dhabi’s benchmark gained 0.2 percent.

In Qatar, the bourse dropped to a four-week low as investors cashed out in post-dividend trading on some stocks. The index shed 0.5 percent. Qatar Islamic Bank lost 5 percent to close at its lowest level since Jan 23. The bank is ex-dividend on a 37.5 percent cash dividend.

United Development Company also fell after a dividend was paid. Shares tumbled 7 percent.

Elsewhere, Oman’s measure slips 0.5 percent to 5,933 points.

In Saudi Arabia, real estate and construction stocks gained after the government issued final regulations on real estate financing, leasing and supervision of financial companies as part of a planned mortgage law to boost a housing shortage in the kingdom.

Saudi Real Estate rose 3.2 percent and Dar Al Arkan added 0.6 percent. The real estate index gained 0.3 percent and the construction index advanced 0.4 percent.

The kingdom’s index however was little changed. Egypt The index fell 0.6 percent to 5,548 points. Dubai The index slipped 0.1 percent to 1,944 points. Abu Dhabi The index gained 0.2 percent to 3,035 points. Qatar The index declined 0.5 percent to 8,653 points. Oman The index slipped 0.5 percent to 5,933 points. Saudi Arabia The index eased 0.02 percent to 7,042 points. Bahrain The index lost 0.1 percent at 1,102 points.