Egypt hits 8-week high after Sawiris return; Gulf markets up
By Nadia Saleem:
Egypt's bourse rose to an eight-week high on Tuesday as corporate news lifted sentiment, while Saudi Arabia's bourse slipped for a third straight session in an otherwise positive regional picture.
Billionaire businessman Naguib Sawiris returned to Egypt on Friday from self-imposed exile, which some saw as a sign that the post-revolution government was moving towards a better relationship with the business community.
He came back days after officials cleared the firm run by his brother Nassef of tax evasion. Authorities also lifted travel bans against Nassef, chief executive of blue chip Orascom Construction Industries, and their father Onsi, founder of Orascom Group.
OCI shares climbed 1.0 percent and heavyweight Commercial Bank International advanced 5.0 percent, as Cairo's benchmark index advanced 1.8 percent to its highest close since March 12.
Meanwhile, major property developer Palm Hills Development rose 4.2 percent after the firm proposed increasing its capital by 600 million pounds ($86.4 million), which analysts said would help plug its funding gap.
"The market is reacting positive to a few things - the Palm Hills capital increase, OCI resolving the tax issue," said Mohamed Radwan, director of international sales at Pharos Securities.
"Sawiris' return is reflecting positively on some companies, namely those with court cases, on expectations the government might lean back towards the business sector."
SAUDI EASES
Saudi Arabia's benchmark eased 0.1 percent, falling for a third session since Saturday's three-week high.
Dubai's benchmark ended flat after a choppy session, but is still the best performing regional market with a 32.5 percent year-to-date gain. Abu Dhabi's index advanced 0.6 percent.
The Dubai and Abu Dhabi bourses are at 41- and 42-month highs respectively, showing little sign of any major pull-back.
"Normally, May is when UAE markets see some profit-taking, but it doesn't seem the case - there is a lot of liquidity coming into the market," said Ali Adou, portfolio manager at The National Investor.
"Valuations-wise, UAE stocks are a bit stretched but there is confidence in the market."
Dubai's index is still about 65 percent below its 2008 peak and Abu Dhabi is 35 percent lower, despite the main U.S. equity markets having recovered to pre-crisis levels. So many investors think UAE markets have further to run in the long term, even if the 2008 highs are not fully regained.
In Qatar, the market edged up 0.1 percent to hit a fresh 13-month high of 8,846 points, still catching up to the rally in other Gulf bourses as valuations attracted some non-Qatari institutional buyers.
The market is up 5.8 percent so far this year. It faces major chart resistance between 8,876 and 8,910 points, its peaks in early 2012.
"There is nice momentum with trading volumes coming up - certain stocks were trading at low valuations and the market realised there is a good buying opportunity," said Yassir Mckee, wealth manager at Al Rayan Financial Brokerage Co.
"The high volumes might not sustain, but there is still buying interest."
Banks led gains with Commercial Bank of Qatar rising 1.4 percent and Qatar National Bank adding 1.1 percent.
In Kuwait, the measure rose 0.8 percent, extending 2013 gains to 31 percent.
Reuters
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