Egypt's bourse rallied on Thursday after army chief Abdel Fattah al-Sisi kept his post in the new government and authorities said a draft election law would be presented this weekend. Other markets were mixed, while Qatar's Mesaieed Petrochemical Holding dropped its daily limit of 10 percent after soaring 450 percent on its bourse debut on Wednesday.
Egypt's index rose 1.6 percent to 8,127 points as it became clear that Sisi would remain defence minister after a surprise government reshuffle. Supported by many Egyptians, Sisi is widely expected to run for president, but the election can only be held once a new law spelling out its rules is in place. The draft presidential election law will be handed to interim President Adly Mansour no later than Saturday for approval, according to state media.
Mohamed Radwan, director of international sales at Pharos Securities, said both developments have buoyed the mood of local retail investors who have shown their confidence in Sisi by bidding up the market since the army deposed Islamist President Mohamed Mursi last year. Dubai's index gained 0.5 percent. Emirates NBD, Dubai's top bank, and smaller rival Commercial Bank of Dubai were the main supports, rising 4.2 and 7.9 percent respectively.
"There's a lot of buying interest in the market and investors will look for any opportunity to pick up stocks," said Amer Khan, fund manager at Shuaa Asset Management. Yet other traders warn valuations are becoming stretched after the market gained 25 percent this year. "There should be some kind of correction expected," said Ali Adou, portfolio manager at The National Investor. "Some of the names are becoming very expensive."
Banks in Abu Dhabi were the main drag as the UAE capital's index fell 0.5 percent after failing to consolidate above 5,000 points. National Bank of Abu Dhabi lost 4.2 percent and First Gulf Bank slipped 0.9 percent. Qatar's index fell 0.6 percent. Qatar Navigation (Milaha) was the most notable loser, tumbling 4.7 percent after it posted a 13 percent drop in fourth-quarter profit.
Mesaieed Petrochemical Holding, Qatar's first IPO since 2010, fell by its daily limit of 10 percent on the second day of trading. Further selling is expected, with analysts warning Mesaieed's first-day surge had valued the stock nearly three times higher than what they considered fair.
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