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DUBAI / Reuters
Most Gulf stock markets rose on Sunday on the back of firm oil prices and global equities, but profit-taking in sectors including petrochemicals pulled down Saudi Arabia.
Dubai’s index rose 1.8 percent to 3,692 points in the heaviest trading volume in nearly a month, which more than doubled from Thursday’s level.
The index climbed above technical resistance at the mid-December peak of 3,659 points; a second straight close above that level would confirm a break, leaving the next chart barrier at the October 2015 peak of 3,740 points.
Seven of the 10 most heavily traded issues were low-priced stocks – below 1 dirham – which local retail investors tend to favour. Two of the 10 were insurance firms, with Dubai Islamic Insurance jumping 4.6 percent and Islamic Arab Insurance adding 3.4 percent. For the past couple of weeks, some traders have been speculating there may be mergers in the insurance industry following last year’s news of a big Abu Dhabi banking merger.
Abu Dhabi’s index climbed 0.7 percent with cement firms leading the gains. Gulf Cement jumped 12.9 percent in very thin trade.
Qatar edged up 0.1 percent, supported by property firm United Development, up 0.9 percent. But Gulf Warehousing fell 1.2 percent despite recommending an annual cash dividend of 1.60 riyals per share, up slightly from 1.50 riyals in the previous year. It said net profit climbed 11 percent last year.
Saudi Arabia’s index fell 0.8 percent. A monthly Reuters poll of Middle East fund managers, conducted at the end of last month, found many believing Saudi stocks were fully valued after a strong rally in the past few months, and not intending to add to their portfolios in the next three months.
Petrochemical firm Saudi Kayan fell 1.1 percent and Nama Chemicals, which has lost about a third of its value this year after its accumulated losses reached over 75 percent of its capital, slid 8.1 percent.
However, builder Abdullah Abdul Mohsin al-Khodari and Sons rose 0.8 percent after saying it had secured a 69 million riyal ($18.4 million) contract from the Ministry of Environment, Water and Agriculture.
The amount is small but Khodari, like other Saudi construction companies, suffered from a severe cut-back in state contract awards last year and the new contract may indicate money is flowing again.
In Egypt, the index climbed 0.5 percent although exchange data showed non-Arab investors turning net sellers of stocks, by a tiny margin, for the first time since the Egyptian pound was floated on November 3.
Qalaa Holdings rose 3.6 percent after saying on Thursday that it was in talks with interested parties to divest its stake in Rift Valley Railways, one of its major overseas assets.
Egypt’s pound strengthens at banks as demand from importers easesÂ
CAIRO / Reuters
The Egyptian pound strengthened slightly at banks as demand for dollars by importers eased, bankers told Reuters on Sunday.
The dollar was being bought for around 18 pounds at most banks, down from around 19 last week. Banks were paying clients around 17.8 per dollar. “The demand for dollar is less,” said one banker. “Banks have reached a point where they don’t need to keep raising prices to attract dollar inflows because there aren’t as many dollar requests by clients for the time being,” he said, adding that once demand picks up prices will start rising again.
Banks in Egypt had been raising the price to buy dollars from clients in order to attract inflows and cover requests from other clients seeking to buy dollars, but they say demand for dollars has eased over the past week.
Business activity in Egypt shrank for the 15th consecutive month in December, although at a slower pace than the previous month, as inflation caused purchase costs to rise at a near-record pace and new orders to drop as the Egyptian pound weakened against the US dollar, a survey showed on Wednesday.
While banks are prioritising imports of essential goods, private individuals are forced to buy dollars on the black market. Three traders on the black market said they were selling dollars at a range of 19.60-19.80 per dollar.
Egypt’s central bank abandoned its currency peg of 8.8 pounds to the US dollar on Nov. 3, hoping to unlock currency inflows and bring back foreign investors who were driven away after the 2011 uprising that ousted Hosni Mubarak.
Under the currency peg, dollar supplies were rationed by the central bank, forcing businesses to go to the black market for foreign currency. Bankers say it will take time for those dollars to be absorbed back into the banking system.
The currency peg drained foreign reserves, and analysts estimate the central bank is still around $10-15 billion short of the stock it needs.