Gulf markets advance on bargain-hunting; Egypt shares upbeat

Egypt’s bourse and most Gulf markets rose yesterday as investors bought stocks oversold in recent days on eurozone fears, while a rise in oil prices helped improve local sentiment. Having hit a 2012 low on Friday, Brent crude rose 73¢ to $107.87 a barrel by 1246 GMT on hopes China could take steps to stimulate growth and lift fuel demand at the world’s second largest oil user.  However, the spectre of European sovereign debt and a potential ‘Grexit’ event - Greece leaving the eurozone - would continue to be a primary driver of regional trading on a lack of domestic catalysts. “The valuations for some of the names, even a couple of weeks ago, were very attractive but, recently, international sentiment has been driving the market lower,” said Amer Khan, fund manager at Shuaa Asset Management, referring to exchanges in the United Arab Emirates and Saudi Arabia. “Many stocks have been oversold recently so we were expecting a pick-up and that it what we’ve got today. But we will continue to take our lead from international markets as there are no local catalysts.” Volumes, which slumped on Sunday, recovered somewhat - the number of shares traded on the Dubai exchange was more than double Sunday’s figure. This, traders said, was a good sign as investors were not dumping stocks in volatile markets and, instead, were waiting to return when opportunities arose. “We’ve recovered from 1,460-1,465 and there were minimal volumes on the downside as investors were not willing to sell at those levels,” said Musa Haddad, head of Mena equity desk at National Bank of Abu Dhabi, about Dubai’s bourse. Dubai’s index made its largest one-day gain in four weeks, climbing 1.5% to 1,488 points. National Central Cooling Company (Tabreed) jumped 4.9% and was the most traded stock on the exchange. The majority of shares made gains on the day. In Abu Dhabi, Aldar Properties and Sorouh Real Estate jumped 4.9 and 5.1% respectively, taking gains in the past three sessions to 11.3% and 8.4%. Sources told Reuters after markets had closed that four banks had been selected to advise on the state-backed merger of the pair. The Abu Dhabi bourse ended up 0.2%. The Saudi index closed above a key psychological level as buyers sought bargains and oil price rises buoyed photochemical stocks. The exchange posted its biggest one-day gain since April 28, rising 0.7% to 7,029 points. Heavyweight Saudi Basic Industries Corp rose 0.5%. In Egypt, the main index gained 1.8%, ending five sessions of declines on bargain-hunting and foreign buying. Anxiety about the outcome of a presidential election nevertheless lingered two days before voting begins. “After their falls yesterday and in days before, prices become attractive enough to buy. It isn’t necessarily a sign of optimism about the direction of elections or the wider state of the economy,” Mohamed Seddiek of Prime Securities said. Talaat Moustafa Group, the country’s biggest real estate developer, jumped 5.7%, and Orascom Telecom and Media climbed 4.6%. “We are seeing some foreign buyers coming into the market,” Teymour el-Derini of Naeem Brokerage said. Elsewhere in the Gulf, Kuwait’s measure slipped 0.1% to 6,415 points; Oman’s index rose 0.1% to 5,623 points and Bahrain’s measure declined 0.2% to 1,146 points.