Egypt's bourse outperformed an otherwise sluggish region on Tuesday on the back of property firms and other bluechips, while banks dragged down Saudi Arabia after the kingdom's central bank tightened consumer lending regulations. The Cairo index rose 1.8 percent, its biggest gain in five weeks, after the country's central bank on Monday kept interest rates unchanged, as expected by the market, and said there was upside risk to the inflation outlook.
-- Oman at 6-year high, offers attractive dividend yield
At its previous meeting on July 17, the central bank had raised benchmark interest rates in a surprise move seen as an attempt to hold down inflation after the government introduced fuel price increases. Expectations for higher inflation have prompted investors to chase property stocks, hoping Egyptians will use real estate as a hedge against consumer price increases.
Shares in developer SODIC rose 2.6 percent on Tuesday, while another property firm, Talaat Moustafa Group , added 2.9 percent. Palms Hills Developments Company rose 1.8 percent and Medinet Nasr for Housing and Development was up 1.1 percent. Another positive factor was a report by Egyptian state-run newspaper Al-Ahram which said state-owned Egyptian General Petroleum Corp had secured a 10 billion Egyptian pound ($1.4 billion) loan which it would use to repay part of its debt to foreign oil companies.
The move means that the foreign companies are likely to continue their operations in Egypt, said Harshjit Oza, assistant director of research at Naeem Brokerage in Cairo. Saudi Arabia's main stock index pulled back 0.6 percent after hitting a fresh six-year high in the previous session. The banking sector benchmark fell 1.3 percent after the central bank said it might cap lenders' retail exposure and would limit fees related to consumer finance.
Al Rajhi Bank, the biggest player in the consumer lending segment, was the largest drag on the main index, sliding 0.9 percent. Other leading retail banks also suffered: Samba Financial Group fell 2.2 percent and Saudi British Bank was down 2.3 percent. The petrochemical sector edged down 0.4 percent. In late trade, security sources said a fire had erupted briefly on a pipeline in the country's Eastern Province after unidentified assailants shot at a security patrol - the first confirmed attack on physical energy infrastructure in the world's largest oil exporter since 2006. Later, the government said it had arrested 88 people plotting "terrorist" attacks at home and abroad.
However, Saudi riyal forwards and credit default swaps did not move in response to the news, suggesting the stock market is unlikely to be worried by it. Dubai's bourse also pulled back after strong gains, slipping 0.5 percent. Shares in Emaar Properties, the emirate's largest listed developer, dropped 3.0 percent. The stock had surged 13.7 percent in the previous two sessions after the company said it would float its malls and retail unit in September.
Dubai Islamic Bank, on the other hand, added 0.5 percent after the lender ruled out seeking a controlling stake in Indonesia's Bank Panin Syariah. Abu Dhabi's index was flat while Qatar's benchmark added 0.3 percent. Qatar National Bank, up 2.8 percent, was the main support. Oman's index rose 0.6 percent to a six-year high of 7,400 points. Oman's relatively small market traditionally attracts the interest of regional investors towards the end of the year as it offers generous dividend payouts. According to Reuters data, Oman's main index has a dividend yield of 3.89 percent, compared with 2.15 percent for Dubai and 3.12 percent for Saudi Arabia.
Comments
Comments are closed.