Egypt's main index surged 4.2 percent to a six-month high on Monday, spurred by news that France Telecom had agreed to buy most outstanding shares in Mobinil at a substantial premium, and most Gulf markets gained. Under a preliminary accord, the French group will buy most Mobinil shares held by Orascom Telecom Media and Technology (OTMT) and offer to buy all listed shares, bringing its stake to 95 percent.
France Telecom agreed to pay 202.50 Egyptian pounds ($33.55) per share, far higher than Mobinil's closing price of 125.36 pounds on Wednesday. Traders said the exchange had cancelled Mobinil's Thursday trades and then suspended trade in the stock as news of the France Telecom purchase had apparently leaked out improperly.
The index surged to its highest close since July 25.
"There were positive vibes among investors after the deal... they are taking more risks," said Naeem Brokerage's Tarek Abaza. OTMT rose 9.9 percent, while only a few Mobinil shares changed hands because of rules limiting daily movements to 10 percent. Mobinil closed at 138 pounds.
Stocks were also lifted by perceptions that growth was picking up after a year of economic and political turmoil, and investors were relieved that a countrywide strike called by activists had passed off with few disruptions.
In Dubai, the index climbed 2.2 percent to a six-month high in the largest volumes since April as small investors' risk appetite grew. Property stocks rose, with Deyaar up 14.7 percent and Union Properties climbing 15 percent.
Gulf Navigation surged 14.9 percent, and National Central Cooling (Tabreed) climbed 10.1 percent.
"Risk appetite has improved over the course of the last four to five weeks ... results have been better than expected and the macro environment, global and local has also improved," said an Abu Dhabi trader who asked not to be identified.
Abu Dhabi's index rose 0.4 percent, with First Gulf Bank up 1.1 percent and National Bank of Abu Dhabi gaining 0.5 percent. In Saudi Arabia, the index rose 0.4 percent to a 21-month high as 354 million shares worth $7.4 billion were traded.
"Generally, there is a lot of positive sentiment, volumes have shot up and all sectors are doing well," said Farouk Miah, citing head of research at NCB Capital.
Sentiment was up after Greek's parliament approved austerity measures to secure a bailout, boosting world stocks.
"To some extent you could argue Greece passing the bill helped, but even if it's dragging on, the market is positioned well," Miah added.
Banque Saudi Fransi gained 2.3 percent, and Kingdom Holding climbed 4.2 percent.
Kuwait's index rose 0.7 percent to a a 21-week high.
"The market is up because of the positive announcement from the companies regarding the fiscal year 2011, especially banks," said Talal al-Hunaif at Coast Investment and Development Co.
Kuwait's central bank governor resigned on Monday, saying increased public spending inhibits the bank's ability to do its job. Traders said this also helped lift sentiment.
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