MIDEAST STOCKS-Egypt rises on housing programme, ignores militants

Wed Feb 19, 2014 9:36am EST

Related Topics

* Egyptian investors believe militants can be contained

* Dubai falls but some stocks rebound near close

* Arabtec rises after winning Kazakh contract

* Qatar Insurance lifts bourse after UK acquisition

* Bahrain up as Arab Banking Corp surges on earnings

By Olzhas Auyezov

DUBAI, Feb 19 (Reuters) - Egypt's bourse rose to a five-year high on Wednesday, ignoring a militant threat against foreign tourists, after the central bank said it would give local commercial banks $1.4 billion to fund mortgages. Most Gulf markets rose though Dubai was hit by profit-taking.

The Sinai-based militant group Ansar Bayt al-Maqdis warned tourists to leave Egypt and threatened to attack any who stayed after Thursday. It is taking aim at an important part of Egypt's economy and a key earner of foreign exchange.

But many Egyptian investors believe the government can prevent the violence in Sinai from seriously destabilising the rest of the country, and that billions of dollars of aid from Cairo's Gulf allies will support its finances.

So the market focused on the central bank's announcement that it would allocate 10 billion Egyptian pounds ($1.44 billion) for low-cost housing projects. The money will be deposited at banks for 20 years at a low interest rate, so they can then lend to citizens to buy houses at a yearly interest rate of 7-8 percent.

In response, the main stock index surged 1.6 percent. Shares in Commercial International Bank (CIB) , the country's biggest listed lender, which has been gaining since Feb. 12 when it posted a 29 percent rise in quarterly net profit, added 3.7 percent on Wednesday.

"The market is driven by optimism post-CIB results of last week and new proposed funding to local lenders to stimulate mortgage financing in Egypt," said Islam Batrawy, Cairo-based head of MENA equity sales at NBK Capital.

Batrawy said of the threat to the tourist industry: "The ultimatum is alarming. However, Sinai has been subject to such incidents since January 2011...The market is disconnected from such events for now."

DUBAI, QATAR

Dubai's bourse posted a second consecutive loss, shedding 0.6 percent due to profit-taking. However, some stocks rebounded towards the end of the session, indicating that the pull-back could be short.

"Selective buying was there on lower support," said Shiv Prakash, senior technical analyst at NBAD Securities. "We have seen such corrections in the past and afterwards we saw new buying and the market reached new highs."

Among gainers on Wednesday was builder Arabtec, which added 0.6 percent after its unit won a $272 million contract for mechanical, electrical and plumbing work at a development run by Abu Dhabi's Aldar Properties in Kazakhstan.

Qatar's bourse rose 1.1 percent, largely on the back of Qatar Insurance Co, which last week announced it would buy Antares Holdings, owner of the Antares Syndicate 1274 at Lloyd's of London. The firm's stock jumped 26 percent on Wednesday.

Bahrain's index gained 0.8 percent as shares in Arab Banking Corp jumped their daily limit of 10 percent, after it reported on Tuesday a 17 percent increase in net profit for 2013 compared with nearly flat earnings a year earlier.

The firm also said on Wednesday it was hiring Ray Ferguson, current chief executive of Standard Chartered Singapore, as chief banking officer.

WEDNESDAY'S HIGHLIGHTS

EGYPT

* The index rose 1.6 percent to 7,741 points.

DUBAI

* The index fell 0.6 percent to 4,152 points.

QATAR

* The index added 1.1 percent to 11,823 points.

BAHRAIN

* The index rose 0.8 percent to 1,358 points.

SAUDI ARABIA

* The index gained 0.1 percent to 8,968 points.

ABU DHABI

* The index rose 0.3 percent to 4,883 points.

OMAN

* The index gained 0.4 percent to 7,189 points.

KUWAIT

* The index slipped 0.1 percent to 7,797 points.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.