Egypt surges as FX control removed

Reuters

Egypt’s stock market surged on Tuesday after the central bank removed caps on deposits and withdrawals of foreign currency for importers, scrapping one of the last currency controls in place since 2011.
The blue-chip index registered its biggest daily jump since March as it rose 2.2 percent to a record closing high of 14,537 points, passing its previous peak in mid-November. The central bank’s move reflects a big improvement in foreign currency liquidity after Egypt obtained a $12 billion International Monetary Fund loan and devalued the pound last year.
Shares in Arabian Cement rose 5.2 percent while real estate developer Talaat Mostafa Group gained 3.6 percent in its heaviest trade since May.
“The market could overcome the recent corrections and break resistance at 14,425 points decisively as the central bank has announced a return to a normal economic situation,” said Ibrahim Nimr, head of technical analysis at the Naeem brokerage in Cairo.
Meanwhile, the Saudi Arabia market edged up for a fifth straight day. The index rose 0.4 percent to 6,967 points, nearing technical resistance around 7,000 points.
Petrochemical shares were firm, with Chemanol gaining 1.5 percent and Petchem advancing 1.7 percent. Builder Drake & Scull rose 2.8 percent in active trade. It announced that its shares had been included in the MSCI GCC index.
In Abu Dhabi, the index edged up 0.5 percent, helped by First Abu Dhabi Bank’s 1 percent advance.
Qatar’s main index fell 0.4 percent to a new six-year closing low, with Vodafone Qatar down 2 percent. The market has been dampened by the news that MSCI may shift to using offshore foreign exchange rates to value the Qatari market.
In a letter to the stock exchange published on Tuesday, the central bank repeated that it would guarantee to all investors on the exchange access to riyals at onshore rates provided that MSCI continued to use onshore rates for its indices.