Gulf shares cheer Fed decision to keep interest rates steady

Reuters

Stocks in the Gulf rallied on Thursday, taking their cue from global shares after the Federal Reserve left U.S. interest rates unchanged and indicated a slower pace of future hikes. Dubai’s main index was the top gainer among its regional peers, jumping 2.0 percent in the most active trade of the week as nine-tenths of the traded shares rose.
Emaar Properties, the largest listed developer and Dubai Investments each gained 2.9 percent. In neighbouring Abu Dhabi, the index advanced 1.0 percent with gainers outnumbering losers by 12 to five. Abu Dhabi National Energy was the second top gainer, soaring 8.0 percent as Brent futures bounced above $47 a barrel as the dollar — the currency in which the commodity trades — was knocked down.
But Dana Gas fell 1.7 percent after it said on Thursday its board had discussed a proposal to buy back shares in the company. The company also expressed its “ dissatisfaction with the non-payment of the company’s outstanding dues in Egypt” without
elaborating.
Qatar’s main index rose 1.6 percent with three-quarters of the shares advancing, trimming its loss for a volatile week to 1.2 percent. Some of the chief gainers were this week’s new entrants to the FTSE’s secondary emerging
market index. Qatar Insurance jumped 3.1 percent and Doha Bank climbed
3.3 percent.
In Egypt, the main index fell 0.3 percent, taking its losses for the week to 0.8 percent. Global Telecom Holding dropped 1.4 percent. Cairo’s three established mobile phone operators have declined to buy fourth-generation (4G) service licences, two Egyptian telecoms officials said.
The only operator which had acquired the licence last month was Telecom Egypt, which jumped 2.2 percent on Thursday. The country’s fixed-line monopoly will now enter the mobile phone market directly for the first time, giving it a distinctive edge over other operators in the industry.
“ The main term in the licence creating the deadlock, in our view, is the dollar portion of the licence, presumably which the operators would find difficult to fulfil, while the government would be keen to receive the dollar payments in one go,” said a note by Cairo’s Naeem Brokerage.
Telecom Egypt had on Aug. 31 paid 5.2 billion Egyptian pounds ($585.59 million) for the licence, 50 percent of which was paid in dollars. The rest will be paid over four years.
Analysts at Naeem Brokerage added that such an “impasse” between regulators and mobile operators could cause damage to the future prospects of their operations in the country, and open the door wider for other international players to acquire the licence. Saudi Arabia’s stock market was closed on Thursday in observance of the kingdom’s national day holiday. It will resume trade on Sunday Sept. 25.