August 8, 2019 / 1:34 PM / 2 months ago

MIDEAST STOCKS-Egyptian blue chips surge on inflation beat, robust earnings

    * Egypt's blue chips see strongest day in six months
    * SODIC surges on strong Q2 results
    * EFG Hermes rises on higher Q2 profit
    * Saudi Investment Bank plunges after swinging to Q2 loss
    * Air Arabia climbs on Q2 profit surge

    By Shakeel Ahmad and Maqsood alam
    Aug 8 (Reuters) - Egyptian blue-chip stocks had their strongest day in
nearly six months on Thursday as better-than-expected July inflation data and a
host of strong corporate earnings buoyed investors ahead of a three-day
religious holiday starting Sunday. 
    Egypt's headline inflation rate fell to its lowest in nearly four years,
dropping to 8.7% in July, defying analyst expectations since it followed a fresh
round of fuel subsidy cuts that pushed domestic fuel prices up by 16%-30%.

    "It's great news for the markets because it reinforces hopes of interest
rate cuts in August. I think the central bank now has enough room to restart its
monetary easing policy going forward," said Allen Sandeep, head of research at
Naeem Brokerage.
    Last month the monetary policy committee kept key interest rates on hold at
15.75% and 16.75% for overnight deposit and lending, respectively.
    Egypt's unemployment rate also fell to 7.5% in the second quarter of 2019,
down from 8.1% in the first quarter.
    Egypt's blue-chip index rose 2.2%, its biggest single-day gain
since February, with Commercial International Bank increasing 1.2%.
    Investment bank EFG Hermes, which posted a nearly 50% surge in the
second-quarter profit, gained 3.5%, while developer SODIC jumped 7.7%
after its profit for the same period rose 8.6% and revenue almost doubled.
    Saudi Arabia's index further gained 0.8% after snapping a five-day
losing streak in the last session. Banks led the gains with Riyad Bank
adding 3.5% and Saudi British Bank leaping 4.8%.
    Capping the gains was Saudi Investment Bank which plunged as much
as 9.1% to its biggest intraday fall in over a decade before closing down 6.2%,
after it swung to a second-quarter loss.
    Dubai's index closed 0.2% higher with Emaar Properties
gaining 1.9% and Air Arabia climbing 3.5% after the budget airline 
posted a 75% jump in its second-quarter profit.
    In Abu Dhabi the index, which on Wednesday ended six days of losses,
fell back 0.4%. Emirates Telecommunications Group slipped 0.9% and
Abu Dhabi Commercial Bank dropped 1.6%.
    Qatar's index was also down 0.6%. Banks were biggest drag on the
index with Commercial Bank dropping 3.6%, while Qatar Gas Transport
 traded 3.5% lower.
    Markets will remain shut for much of next week on account of Eid holiday
that begins on Sunday and lasts for a week in Saudi Arabia and at least three
days in other Gulf countries.
 SAUDI ARABIA  The index         rose 0.8% to 8,550 points
 ABU DHABI     The index        fell 0.4% to 5,097 points
 DUBAI         The index          was up 0.2% to 2,838 points
 QATAR         The index        lost 0.6% to 9,835 points
 EGYPT         The index          rose 2.2% to 14,180 points
 BAHRAIN       The index        was flat at 1,544  points
 OMAN          The index        gained 0.6% to 3,862 points
 KUWAIT        The index        was down 0.4% at 6,719 points
 
 (Reporting by Shakeel Ahmad and Maqsood Alam in Bengaluru
Additional reporting by Nadine Awadalla
Editing by Frances Kerry)
  
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