Egypt's stock market pared its advance on Monday after two sessions of strong gains on the back of speculation that the North African nation would need to devalue its currency during the current fiscal year. Having risen as much as 1.7 percent earlier in the day, Egypt's main measure closed 0.2 percent lower, with most stocks ending in the red.
The index had surged 7.7 percent in the two sessions straddling the Eidul-Fitr holiday, following comments from the central bank governor that the Egyptian pound should be a market-based currency where demand and supply set the price.
The sentiment chimed with economists' views that another currency devaluation in the fiscal year which runs to June 30 is inevitable. Real estate-related stocks which had led winners in the last two sessions gave up some of their gains: developers Talaat Mostafa Group Holding and Sixth of October Development and Investment Co (SODIC) dropped 5.5 percent and 2.1 percent respectively having closed limit up the previous day.
One of the few exceptions was Global Telecom Holding, which rose 2.9 percent to hit a fresh 15-month high. Qatar's index breached the 10,000-point mark for the first time since mid-May as it resumed trading after the Eid holiday, which marks the end of the Muslim fasting month of Ramadan. Banks led the way, with Qatar Islamic Bank up 2.9 percent, as was Qatar National Bank on the day before it reports its second-quarter numbers. Analysts polled by Reuters expect the Middle East's largest bank to post a 10 percent increase in net profit.
Dubai's market recorded its highest close since May 1, up 0.2 percent. Neighbouring Abu Dhabi's measure continued its retreat from last Monday's 9-1/2 week high, slipping 0.6 percent as many names which had been boosted by merger hopes shed some of their recent gains. National Bank of Abu Dhabi was the main drag, down 3.4 percent. Its planned tie-up with First Gulf Bank to create one of the largest lenders in the Middle East and Africa had led to speculation around other bank mergers in the emirate.
Union National Bank, considered a prime candidate for consolidation, dropped 3.1 percent on Monday after jumping 12.5 percent in the previous four sessions. Saudi Arabia's bourse advanced 0.2 percent, aided by gains in mid-cap petrochemical firms including Saudi Kayan Petrochemical and National Industrialisation (Tasnee), which rose 3.8 percent and 6.1 percent respectively. Advanced Petrochemical bucked the trend, slipping 0.2 percent after reporting a 23.5 percent year-on-year decline in second-quarter net profit to 186 million riyals ($49.6 million). The figure was in line with the average estimate of three analysts, according to Thomson Reuters Eikon data.
Kuwait's exchange dipped 0.3 percent, with most trading in small-cap stocks, a sign of speculative retail investors dominating amid a lack of catalysts. The heaviest-traded stock was National Ranges Co, which fell 1.85 percent.