* Unconfirmed report that Orascom reaches initial tax deal
* Stock rallies 4.2 percent; could clear way for buyout
* Locals buy Egypt small-caps; foreigners are net sellers
* Banks support Dubai market; ENBD up 2.5 percent
* Doha Bank continues slide from Monday's high
By Nadia Saleem
DUBAI, March 21 Egypt's bourse rose from a
14-week low on Thursday as investors bet Orascom Construction
Industries might soon reach a deal with tax
authorities, while Gulf markets were mixed in thin trading ahead
of the weekend.
Egyptian newspaper Al Borsa quoted unnamed sources as saying
the Ministry of Finance had reached an initial agreement with
OCI under which the firm would pay 7 billion Egyptian pounds
($1.03 billion) of tax. There was no immediate comment from
Earlier this month, the public prosecutor barred OCI's chief
executive Nassef Sawiris from travelling abroad as part of an
investigation into accusations that the company had evaded about
14 billion Egyptian pounds of taxes related to the sale of
subsidiary Orascom Building to France's Lafarge.
Resolving the tax dispute might clear the way for a buyout
of OCI shares by its Amsterdam-listed affiliate, some investors
think; authorities have delayed the progress of the offer to buy
the shares at 280 pounds each as they try to pressure OCI into
undertaking not to delist from Cairo.
OCI's shares rallied 4.2 percent to 240 pounds on Thursday
while Cairo's benchmark index advanced 1.2 percent to
5,224 points; it is now down 11.2 percent from its high in early
Local and regional bargain-hunters bought small-caps, though
non-Arab foreign investors remained net sellers. Talaat Mostafa
climbed 2.9 percent.
"The medium-term trend of the market is still up...The
recent consistent decline off 5,800 - which is a downward
correction within the current medium-term uptrend - is expected
to find support prior to the latest explicit bottom on the
weekly chart of the EGX30 Index at 4,700," Pharos Holding
Research said in a note.
Elsewhere, banks helped Dubai's index gain 0.6
percent, though buying was not heavy as investors awaited
first-quarter earnings season, which will start in mid-April.
The index fell 0.3 percent this week and is up 17.7 percent
"Overall, I expect markets to cool down a bit, and Air
Arabia and Aramex should be defensive
plays," said Ali Adou, portfolio manager at The National
Investor. The two stocks are seen as proxies for Dubai's buoyant
tourism and services sectors.
Top bank Emirates NBD was the main support for the
market, rising 2.5 percent. Lower provisioning and signs Dubai's
troubled property sector is recovering will help banks, Adou
Abu Dhabi's measure slipped 0.8 percent, trimming
2013 gains to 13.9 percent.
Elsewhere, Qatar's benchmark advanced 0.3 percent,
trading within a narrow range since hitting a two-month low in
late February. Large-caps gained, with Industries Qatar
up 0.9 percent.
Shares in Doha Bank dipped 1.3 percent, declining
for a third session since Monday's four-week high. Its recent
rally was driven by unconfirmed talk that the bank might
postpone plans to raise capital through an issue of global
"Doha Bank is an interesting story because the
delay/cancellation of its GDRs will translate to a better return
on equity," said Adou.
* The index rose 1.2 percent to 5,224 points.
* The index climbed 0.6 percent to 1,910 points.
* The index declined 0.8 percent to 2,995 points.
* The index gained 0.3 percent to 8,606 points.
* The index slipped 0.2 percent to 6,816 points.
The index eased 0.05 percent to 6,130 points.
* The index declined 0.2 percent to 1,118 points.