Egyptian blue chips surge on inflation beat, robust earnings

Egyptian blue-chip stocks had their strongest day in nearly six months on Thursday as better-than-expected July inflation data and a host of strong corporate earnings buoyed investors ahead of a three-day religious holiday starting Sunday.
Egypt's headline inflation rate fell to its lowest in nearly four years, dropping to 8.7% in July, defying analyst expectations since it followed a fresh round of fuel subsidy cuts that pushed domestic fuel prices up by 16%-30%.
"It's great news for the markets because it reinforces hopes of interest rate cuts in August. I think the central bank now has enough room to restart its monetary easing policy going forward," said Allen Sandeep, head of research at Naeem Brokerage.
Last month the monetary policy committee kept key interest rates on hold at 15.75% and 16.75% for overnight deposit and lending, respectively.
Egypt's unemployment rate also fell to 7.5% in the second quarter of 2019, down from 8.1% in the first quarter.
Egypt's blue-chip index rose 2.2%, its biggest single-day gain since February, with Commercial International Bank increasing 1.2%.
Investment bank EFG Hermes, which posted a nearly 50% surge in the second-quarter profit, gained 3.5%, while developer SODIC jumped 7.7% after its profit for the same period rose 8.6% and revenue almost doubled.
Saudi Arabia's index further gained 0.8% after snapping a five-day losing streak in the last session. Banks led the gains with Riyad Bank adding 3.5% and Saudi British Bank leaping 4.8%.
Capping the gains was Saudi Investment Bank which plunged as much as 9.1% to its biggest intraday fall in over a decade before closing down 6.2%, after it swung to a second-quarter loss.
Dubai's index closed 0.2% higher with Emaar Properties gaining 1.9% and Air Arabia climbing 3.5% after the budget airline posted a 75% jump in its second-quarter profit.
In Abu Dhabi the index, which on Wednesday ended six days of losses, fell back 0.4%. Emirates Telecommunications Group slipped 0.9% and Abu Dhabi Commercial Bank dropped 1.6%.
Qatar's index was also down 0.6%. Banks were biggest drag on the index with Commercial Bank dropping 3.6%, while Qatar Gas Transport traded 3.5% lower.
Markets will remain shut for much of next week on account of Eidul Azha holiday that begins on Sunday and lasts for a week in Saudi Arabia and at least three days in other Gulf countries.