Telecommu-nications firm Zain Saudi led Riyadh’s stock market up on Sunday, while Egypt’s bourse stalled after soaring last week in response to a currency devaluation. Most Gulf markets moved little, digesting strong rallies since mid-February.
The Saudi Tadawul All-Share Index climbed 1.4 percent in active trade to 6,482 points, testing technical resistance on its 100-day average, now at 6,470 points. Sunday saw the index close above that average for the first time since June last year, when the slide in oil prices was pushing the bourse into a downtrend.
Zain Saudi jumped 9.4 percent in its heaviest trade since last September, bringing its gains to 23 percent since Reuters reported on Wednesday that its Kuwaiti parent Zain was narrowing the field of potential bidders for its mobile transmitter towers in Saudi Arabia and Kuwait.
In a brief statement after the close on Sunday, the parent Zain said there were no fresh developments in its plans to sell the towers.
Another Saudi telecommunications firm, Mobily, rose in sympathy with Zain, gaining 4.5 percent; it is also trying to offload its towers.
Elsewhere in the Saudi market, most blue chips moved little but some second-tier stocks favored by local speculators jumped, with Tihama Advertising rising 5.2 percent.
Dubai’s index edged up 0.1 percent as blue chip Emaar properties lost 1.4 percent but Arabtec surged 6.8 percent. After the close, the construction firm said it had won a AED1.7 billion ($463 million) contract from the UAE government to build 1,100 houses in the eastern emirate of Fujairah.
Abu Dhabi dropped 2.4 percent as First Gulf Bank , which went ex-dividend last week, fell a further 6.6 percent.
Telecommunications firm Etisalat sank 1.9 percent. At the end of last week, international index compiler FTSE Russell added Etisalat to its All-World and other indexes; the stock dropped 4.0 percent on Thursday in very heavy trade, and Sunday’s decline suggested traders who had bought in anticipation of the inclusion, hoping to sell to passive funds entering the stock, were continuing to unload it.
Egypt’s index fell back 0.3 percent after leaping 14 percent last week because of the devaluation, which raised hopes that the country could attract more foreign capital and end its endemic foreign exchange shortage.
Late on Thursday, the central bank raised key interest rates by 150 basis points to fight the inflationary pressure which the devaluation is expected to create. The hike was bigger than expected — the market had been anticipating between 50 and 100 bps — but investors have been focusing on the potential of higher rates to attract foreign exchange inflows, so higher rates did not do much damage to stocks.
The majority of the 10 most heavily traded Egyptian stocks moved little but there was profit-taking in real estate firms, which soared last week on the belief that the sector was a hedge against any inflation produced by the devaluation.
Palm Hills Development lost 1.5 percent and Emaar Misr sank 3.7 percent.
SourcE: Arab News