MIDEAST STOCKS-Saudi real estate sector rises; Egypt's OCI up

DUBAI, March 24 Sun Mar 24, 2013 9:25am EDT

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DUBAI, March 24 (Reuters) - Saudi Arabia's real estate share index rose to a 10-month high on bets the sector will benefit from a new mortgage law being introduced, and Egypt's heavyweight Orascom Construction Industries helped lift Cairo's bourse.

In late February, the kingdom issued final regulations on real estate financing, leasing and supervision of financial companies as part of a planned mortgage law, which the government hopes would help rectify a significant housing shortage in Saudi.

Developers Taiba Holding surged 9.1 percent, Jabal Omar climbed 1.6 percent and Makkah Construction and Development added 2.2 percent.

"Taiba is an excellent company in terms of valuations and growth but there is no fundamental reason behind this move," said Mohammad Omran, a Riyadh-based independent financial analyst. "People are speculating on the mortgage law, which presents a short-term opportunity."

Omran said that while the application of the law will be gradual, other sectors such as banks and cements should also benefit.

Bottom-line impact from the long-awaited mortgage law could take months, analysts said.

The real estate sector index rose 1.4 percent to its highest level since May 2012. It outperformed the main benchmark, which gained 0.6 percent.

In Egypt, heavyweight Orascom Construction Industries gained 2.6 percent after a choppy session on unconfirmed news reports it would soon resolve a tax dispute with the government.

Various news reports have said OCI offered to pay an amount of around 7 billion pounds to settle the case.

The Egyptian authorities have been investigating charges the company failed to pay some 14 billion Egyptian pounds of taxes on the sale of Orascom Building, an OCI subsidiary, to French firm Lafarge.

OCI said in a statement to the exchange that talks with the tax authority were ongoing and it hoped to reveal details at the earliest opportunity.

"OCI will meet with the head of the authority this week to seek solutions," an official at the Egyptian Tax Authority told Reuters on Sunday, adding negotiations are ongoing with OCI.

Orascom Telecom (OT) rises after a newspaper report said Algeria's government would lift sanctions on the operator's unit Djezzy, while Cairo's bourse holds steady near technical support levels in muted trade.

Sanctions on Djezzy that prohibit the company from making payments in foreign currency and importing equipment will be lifted, according to a report in Algerian newspaper Al-Fadjr.

OT said in a bourse statement "it has not been informed of any fundamental developments regarding this matter," referring to the news report. Shares in the telecom operator rose 2.9 percent.

Cairo's benchmark advanced 0.6 percent, extending gains from a 14-week low.

Elsewhere, UAE markets slipped in muted trade as investors turn cautious following an early-year surge and await first-quarter earnings. Dubai's measure slipped 0.6 percent and Abu Dhabi's index eased 0.06 percent.

"There isn't any news in the market to grab investors' attention - it's all about dividends," said Mohab Maher, senior manager - institutional desk at MENA Corp.

"The market will go sideways or may correct this week then rebound again in April for first-quarter results."

Corporate earnings season in Dubai will begin in late April. Investors usually adjust holdings ahead of results.

Qatar's bourse declined 0.3 percent. The index has traded within a 65-point range for the last week, signalling a lack of momentum.

SUNDAY'S HIGHLIGHTS

SAUDI ARABIA

* The index rose 0.6 percent to 7,138 points.

EGYPT

* The index climbed 0.6 percent to 5,256 points.

DUBAI

* The index slipped 0.6 percent to 1,898 points.

ABU DHABI

* The index eased 0.06 percent to 2,993 points.

QATAR

* The index slipped 0.3 percent to 8,579 points.

KUWAIT

* The index gained 0.2 percent to 6,831 points.

OMAN

The index advanced 0.6 percent to 6,169 points.

BAHRAIN

* The index declined 0.2 percent to 1,115 points.

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