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. Industries Qatar was down 0.9 percent. 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. Emaar was down 1.1 percent at a two-year low.
Abu Dhabi's index was flat, although Waha Capital fell 7.8 percent after going ex-dividend. In Kuwait, the market has been soft since authorities divided it into three on Sunday as part of reforms designed to boost liquidity and attract more foreign money: the premier market, the main market and the auction market.
The index for the premier market, home to the largest and most liquid companies, fell for the third straight session and was down 1.2 percent. Oman's benchmark index rose 0.5 percent, led by banks such as National Bank of Oman which gained 3.8 percent. The central bank relaxed capital and credit exposure rules for commercial banks in an effort to boost lending and economic growth.
Comments
Comments are closed.