DUBAI, May 2 (Reuters) - Egypt’s bourse rallied on Thursday after its largest listed firm, Orascom Construction Industries (OCI), struck a $1 billion deal with authorities to settle a protracted tax dispute, while most Gulf markets gained.
Cairo’s bourse rose 1.5 percent to a near three-week high, trimming year-to-date losses to 3.4 percent in the process.
OCI shares climbed 3.7 percent, its highest close since March 12. The settlement with the Egyptian Tax Authority should pave the way for OCI to go ahead with a plan for its Dutch-listed parent company to publicly tender for OCI shares listed on the Egyptian stock exchange, OCI said.
If the tender offer goes ahead, it will be seen as a sign that Egyptian authorities are willing to put aside political considerations when making regulatory decision.
“OCI’s news removes the overhang on the market and could signal the government may take the same approach with other troubled businessmen caught up in court cases,” said Reda Gomaa, portfolio manager at Dubai lender Mashreq.
An Egyptian criminal court sentenced steel tycoon Ahmed Ezz to 37 years in prison in March for profiteering and squandering public funds and fined him 6 billion Egyptian pounds ($890 million).
Meanwhile, EFG Hermes said on Wednesday it had been forced to cancel its planned tie-up with Qatar’s QInvest after the Egyptian regulators failed to approve the deal almost a year after it was agreed by the firms.
The tie-up was considered politically sensitive because both of EFG’s co-chief executives, Hassan Heikal and Yasser El Mallawany, are on trial, along with the two sons of ousted President Hosni Mubarak, over allegations of illegal share dealings in relation to a 2007 transaction.
EFG Hermes shares fell 1 percent
In the Arab Gulf, Dubai’s bourse slipped 0.4 percent, off Wednesday’s 41-month high. Some investors had expected marginal profit-taking on the index, which is still up 31.4 percent this year.
“We had good Q1 results, supportive for the recent rally, but it’s time for a breather,” said Rami Sidani, head of investment at Schroders Middle East.
Selling pressure is likely to be met with renewed buying though, with foreign investors waiting for buying opportunities.
“We’re seeing an increase in foreign participation - underlying economic numbers are all signalling very good growth across the main sectors. We expect money to keep coming in because of the high dividend yield,” Sidani added.
Most other Gulf markets rose as strong regional fundamentals outweighed concerns over weak global economic data.
Abu Dhabi’s measure gained 0.2 percent, taking its year-to-date advance to 24.6 percent.
In Qatar, expectations of a delay in the upcoming initial public offering of Doha Global Investment has brought back money from the sidelines that investors were holding for the new listing.
The investment firm is backed by assets from the sovereign wealth fund. It was set to list in May, but some say it may be delayed to early-June. It is expected ultimately to hold about $12 billion of assets, raising $3 billion from its IPO.
Doha’s benchmark hit a 10-week high, up 0.9 percent. Large-caps Industries Qatar and Qatar National Bank gained 1.4 and 1.7 percent respectively.
Elsewhere, Kuwaiti small-caps helped buoy the index, which rose 0.4 percent to its highest close since October 2009.
Oman’s bourse added 0.3 percent.
Global cues had been negative during Gulf trading hours. Asian shares had declined as weak data from the U.S. and China spurred concerns, and Europe awaited the ECB’s interest rate decision later in the day.
* The measure rose 1.5 percent to 5,277 points.
* The index slipped 0.4 percent to 2,129 points.
* The index gained 0.2 percent to 3,280 points.
* The benchmark climbed 0.9 percent to 8,749 points.
* The measure advanced 0.4 percent to 7,594 points.
* The index gained 0.3 percent to 6,146 points.
* The measure slipped 0.1 percent to 1,103 points.