Egypt shares soar to six-week high ahead of cabinet formation
Egypt’s shares rose to a six-week-high Tuesday as the interim president moved forward with forming a Cabinet to restore full civilian rule despite deadly street clashes. Cairo’s main benchmark climbed 0.9 percent to its highest since June 2.
Former Investment Minister Osama Saleh said Tuesday he would take up the same post in the country’s transitional government.
Interim Prime Minister Hazem al-Beblawi is putting together a Cabinet largely of technocrats and liberals after the army toppled President Mohammad Mursi on July 3.
“Now that the final structure of the interim government is almost complete, we view the economic team as significantly more coherent and competent than all the teams appointed post the January 2011 revolution [which ousted Hosni Mubarak],” Hany Genena, head of research at Pharos Research said in a note.
The sentiment was also buoyed by comments from tycoon Naguib Sawiris, whose family owns the Orascom empire. He told Reuters he and his brothers will be “investing in Egypt like never before” after the ousting of a president.
Egyptians were net buyers, according to bourse data.
But positive investment sentiments were dampened by the death of seven people and the wounding of more than 260 when supporters of Mursi clashed with the deposed Egyptian president’s opponents and security forces through the night.
In the United Arab Emirates, Dubai’s benchmark slipped off a 57-month high, snapping an eight-session rally and trimming 2013 gains to 50.7 percent.
The index slipped 0.5 percent to 2,447 points, as it hit chart resistance near 2,500 points; the June intraday peak.
“Dubai is retesting the high we hit in June; we need to break the resistance on strong volumes,” said Amer Khan, fund manager, Shuaa Asset Management. “A breather here would be good but I expect it to move up for the rest of the year because it has a lot of catalysts.
An MSCI upgrade for UAE to emerging market status in June will continue to underpin a positive sentiment, with hopes of Dubai winning the World Expo 2020 bid adding its weight. Bid results will be announced in November.
Abu Dhabi’s index climbed 0.5 percent, hitting a fresh 57-month high.
Elsewhere, Saudi petrochemical shares extended losses on weak quarterly earnings.
Saudi Basic Industries Corp., the world’s largest chemicals producer, slipped 0.5 percent. Its subsidiary, Saudi Kayan, posted below-forecast earnings, following the trend of two sister companies. Kayan, which reported a narrower loss but failed to match estimates, fell 2.6 percent.
Saudi Arabia Fertilizers Co., which missed estimates with an 11.6 percent profit decline Sunday, slumped 4.6 percent, its third straight loss.
The kingdom’s measure ticked up 0.05 percent.
In Oman, Bank Sohar and Bank Dhofar rose 2 and 1.3 percent respectively on merger talks. Dhofar said Tuesday it would begin talks with fellow lender over a possible merger but any potential tie-up would be dependent on a similar desire from Sohar.
Muscat’s benchmark rose by some 0.2 percent.