Pedestrians pass the Egyptian stock exchange in Cairo. The Egyptian index climbed 2.0% to 6,779 points yesterday, its third straight day of gains.
Egypt’s stock market rose yesterday on hopes that the central bank would resolve the country’s foreign exchange shortage, while Gulf markets fell back because of an overnight tumble of oil prices.
The Egyptian index climbed 2.0% to 6,779 points, its third straight day of gains. Its break of minor chart resistance on the late November peak triggered a double bottom formed by the November lows and pointing up to just below 7,000 points.
Egypt’s central bank will inject US dollar liquidity into the market this month and plans an exceptional foreign exchange auction, the Egyptian presidency said late on Wednesday.
But it remains unclear where Egypt will obtain the hard currency to increase dollar supplies, and many economists think a devaluation at some point remains inevitable.
Non-Arab foreign investors have remained net sellers of stocks as the market has risen in the past three days, exchange data showed, indicating many are still wary.
Global Telecom climbed 3.2% to 1.92 Egyptian pounds yesterday after surging to its 10% daily limit on Wednesday, when it said a newspaper, which it did not name, had reported rumours that European firm Vimpelcom had offered to buy out Global at a price of 2.30 pounds per share. Vimpelcom already owns about 52% of Global.
“The company does not respond to rumours and confirms that the company does not have any material events unannounced,” Global said without elaborating. Contacted by Reuters in Amsterdam, Vimpelcom said: “As a matter of policy, we don’t comment on market rumours and speculation.”
Allen Sandeep, director of research at Naeem brokerage, reiterated a “buy” rating on Global. He said Vimpelcom might use part of the proceeds from a loan refinancing expected by the end of this year to make an offer to buy the rest of Global.
The Saudi stock index declined 1.1% after Brent oil, hit by expectations that Opec would keep its output ceiling unchanged at this week’s meeting, sank more than 4% to below $43 a barrel overnight — though it partially rebounded yesterday.
All sectors were lower with the exception of consumer discretionary stocks, as Al Tayyar Travel surged 9.6% in a second day of very heavy trade after climbing 8.8% on Wednesday.
Traders cited a rumour on Wednesday that a Saudi investment company would buy a stake in the firm; an Al Tayyar official was not available to comment.
Kingdom Holding gained 4.6% after jumping 8.5% on Wednesday in its third day of unusually heavy trade. Reuters data shows DB Platinum Advisors, a Luxembourg-based investment firm and subsidiary of Deutsche Bank, has been increasing its stake in the firm since March. It held 40,000 shares as of the end of October, the data showed. That is a tiny fraction of the company’s 3.7bn shares, but the free float is much smaller — Prince Alwaleed bin Talal owns 95% — so such purchases may help to drive up the stock price. A phone call to DB’s Luxembourg offices seeking comment was not answered.
The Qatar stock index retreated 0.7% in thin trade. Blue chips were sold, even defensive stocks, with heavyweight Qatar National Bank dropping 1.5% and telecommunications operator Ooredoo sliding 7.1%.
The Dubai, Abu Dhabi and Oman markets were closed for National Day holidays.
In Kuwait, the index dipped 0.3% to 5,789 points and the Bahrain index increased 0.2% to 1,227 points.
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