Saudi Arabia's bourse edged up on Monday after oil prices hit a new 2015 high, while profit-taking continued in the United Arab Emirates. Egypt's market rose after the central bank sold some foreign currency to address shortages faced by importers. Brent crude rose to a 2015 high of $67 a barrel on Monday, supported by expectations that the crude supply glut would ease and after weak Chinese factory activity reinforced views that stimulus measures would be rolled out.
The main Saudi stock index added 0.2 percent and petrochemicals giant Saudi Basic Industries (SABIC) was the main support, rising 1.3 percent. Other stocks in the sector, which is set to benefit from oil's rebound, were also strong. Saudi Kayan Petrochemical Co jumped 2.8 percent and Saudi International Petrochemical Co added 2.5 percent.
Saudi Pharmaceutical Industries & Medical Appliances Corp (SPIMACO) jumped 2.5 percent after saying it would sell one of its foreign assets to a US firm, pending regulatory approval, and book a profit of about 150 million riyals ($40 million) from the deal; it didn't name the asset or the buyer. SPIMACO's board also approved making an offer to buy a 51 percent stake in Cairo-based Meivo International for Pharmaceuticals Industries Co for $19.3 million.
Middle East Paper Co once again surged its daily 10 percent limit after listing on Sunday following a heavily oversubscribed 450 million riyal initial public offer. Dubai's index fell 1.2 percent to 4,084 points as investors continued to book profits and ignored positive results posted by Emaar Properties, the emirate's largest listed developer, whose shares fell 1.8 percent. The company reported a better-than-expected 7 percent increase in first-quarter net profit late on Sunday. But according to Naeem brokerage, the profit boost was partly due to the adoption of a new accounting policy which allows firms to recognise revenue based on percentage of projects completed instead of their handover or sales on delivery.
However, Naeem said the earnings were still strong and it maintained a "buy" recommendation on the stock with a target price of 14.61 dirhams, against Monday's close of 7.80 dirhams. Having surged 20 percent last month, the Dubai benchmark failed to break through major technical resistance at its 200-day average, now at 4,241 points, on Thursday and Sunday, prompting the current profit-taking bout. It has strong technical support around 4,000 points, where it peaked repeatedly between December and February.
Other Gulf markets were mixed, having closed before oil rose to new highs. Abu Dhabi fell 1.4 percent and Qatar's bourse edged down 0.6 percent. Meanwhile, Oman edged up 0.4 percent and Kuwait's index was nearly flat. Burgan Bank fell 1.1 percent after reporting a 2 percent rise in first-quarter net profit to 17.54 million dinars ($58.2 million). Three analysts polled by Reuters had predicted, on average, a net profit of 19.94 million dinars for the quarter.
Egypt's index rose 1.0 percent after the Cairo central bank said it had sold $500 million in the interbank market to meet outstanding demand for "strategic staple food commodities". Foreign currency shortages are one of the main concerns for Egyptian companies, and have been one major reason for the stock market's weak performance in recent months. The central bank sold $281 million in the interbank market last month and $420 million in March to meet similar demand for dollars.
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