Egypt's bourse climbed to a seven-week high on Monday after the first sitting of the country's new parliament lifted hopes of political stability, while Gulf markets were mixed. Cairo's main index rose 2.4 percent to its highest close since December 6. Almost one year since an uprising unseated President Hosni Mubarak, Egypt's turbulent politics remain a major obstacle to a return of investor confidence to the country.
"The first session of parliament is giving a psychological boost for investors," said Mohamed Radwan, head of equities at Pharos Securities. "It looks more like things are progressing and it's a step towards a more stable environment." The index has risen more than 10 percent this month and traders have reported some buying by foreign investors, but they said plans for mass protests against the army on the anniversary of the street revolt have limited market gains.
In Saudi Arabia, telecoms operator Zain Saudi helped lift the market on talks the company will get regulatory approval shortly for a capital restructuring. The firm is seeking to cut its capital by 55 percent to cover accumulated losses and proposed subsequently issuing 4.4 billion riyals ($1.17 billion) worth of new shares.
Shares in Zain jumped 5.3 percent to their highest close since October 12 and the index gained 0.2 percent. "We are expecting the authorities to approve it any minute... It has already taken much longer than people expected," said Mohammad Omran, a Saudi based financial analyst.
Small and mid-cap stocks accounted for increased trading, with Nama Chemicals jumping 9.7 percent, Saudi Fisheries rising 3.1 percent and National Shipping Company gaining 6.4 percent. Buying in insurance and small-caps are expected to be high as investors look to benefit from the volatility, traders said. In Qatar, the index slipped 0.4 percent to its lowest close since October 20, as banks' cash dividends disappointed.
Masraf Al Rayan shed 1.8 percent, while Industries Qatar declined 0.4 percent. Qatar International Islamic Bank fell 1.7 percent after posting an annual net profit rise of 17 percent and recommended a 3.50 riyals cash dividend. "It's a favourite stock among local investors but they are still expecting (higher) dividends," said Ali Al Enin, equity trader at Qatar National Bank. Dubai 's index and Abu Dhabi's benchmark gained 0.5 percent each as investors accumulated battered stocks on expectations for fourth-quarter earnings.
Telecoms operator du advanced 0.4 percent, Air Arabia climbed 1 percent and contractor Arabtec rose 4.1 percent. "We're seeing money coming in and allocating into blue chips in Dubai and Abu Dhabi," said Marwan Shurrab, vice-president and chief trader at Gulfmena Investments. "Banks in Abu Dhabi are in focus on expectations that Q4 numbers will be coming out by the end of the month. Investors are also looking forward to high-dividend yield stocks." National Bank of Abu Dhabi gained 2.4 percent, Abu Dhabi Commercial Bank rose 0.7 percent.
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