Egypt falls on failed buyout offer, Gulf mostly lower

Reuters

Egyptian stocks fell on Tuesday, hit by a plunge in index heavyweight Global Telecom after the company’s majority shareholder withdrew a buyout offer, while Saudi Arabia stabilised after three days of falls.
Most Gulf markets were lower or flat in the absence of fresh cues ahead of quarterly earning announcements for companies, which began this week.
A six-day rally in Egypt’s blue-chip index ended with a 1.1 percent drop, on news that Amsterdam-based Veon, which owns about 57 percent of Global Telecom, withdrew its offer to buy the remaining shares.
Its decision came after delays in obtaining regulatory approval since the deal was launched in November, and amid an ongoing tax dispute between the target company and Egyptian authorities.
Global Telecom plunged almost 16 percent to close at 5.61 pounds ($0.3188), hitting its lowest level this year. The news pushed down other telecommunications stocks such as Orascom Telecom Media and Technology, which dropped 4.6 percent.
Despite Tuesday’s sell-off, the Egyptian market is still 16.5 percent up so far this year, beating other Middle Eastern indexes, as investors are attracted by the country’s improving economic outlook.
“We see the macro picture improving dramatically as low inflation drives interest rate cuts, higher tourism numbers, government awarding contracts and companies planning expansions and thinking about growth,” said Vrajesh Bhandari, a portfolio manager at Dubai-based Al Mal Capital.
The Saudi index closed 0.2 percent higher after three days of selling that was triggered by profit-taking after FTSE Russell’s decision last week to upgrade the bourse to emerging market status. Property firm Dar Al Arkan surged 7.6 percent.
The Qatari index was flat, hurt by weakness in blue chips following gains in recent days on the back of moves by top companies to increase foreign ownership ceilings.
The Dubai index slipped 0.2 percent, once again dragged down by Emaar Properties, which has suffered from concern about the sluggish outlook for the local real estate market. Abu Dhabi’s index was flat, although Waha Capital fell 7.8 percent after going ex-dividend.

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