Middle East markets: Egypt bourse climbs

Egypt's bourse climbed to a new seven-month high on Wednesday on optimism following upbeat government forecasts for the economy, while news of progress on Nahkeel's debt restructuring lifted Dubai stocks. Egypt's announcement of an off-budget economic stimulus worth up to $3.4 billion and forecasts of accelerating growth have bolstered prospects for corporate earnings.
Stocks benefiting the most from renewed investor interest included Ezz Steel, Commercial International Bank and Orascom Construction, which gained 2.2 percent, 2.3 percent and 0.4 percent respectively. Traders said most investors have stayed on the sidelines over the year-end holiday period but some local high-net worth and retail investors are buying, encouraged by the index's push above 7,000 points.
"There have been some positive statements coming from government officials in the past four to six weeks and people are attributing the index's rise above 7,000 points to that," said Mohamed Radwan of Pharos Securities. The index ended 0.7 percent higher at 7,077 points, its highest close since May 6.
In Dubai, real estate stocks drew investors after developer Nakheel said it had secured more trade creditor support for its cumbersome restructuring plan. Bellwether Emaar Properties rose 2.1 percent and constructing giant Arabtec climbed 1.6 percent, helping the index gain 1.1 percent and snap a three-day losing streak. "There is very little institutional activity in Dubai and Abu Dhabi, most of the western accounts have downed tools for the year," said Julian Bruce, director of institutional equity sales at EFG Hermes.
"We still have the full-year numbers to get through, and a number of question marks remain, such as Emaar and its handling of Amlak, and bank provisions." Several regional bourses ended the day largely flat, including Abu Dhabi, and Saudi Arabia where Wednesday was the year's last trading day.
The largest Gulf market ended the year up about 8 percent, but Shuaa Capital warned that Saudi banks would be in focus for fourth-quarter profitability. "We expect the month of December to highlight further pressure on the bottom line as Saudi banks will continue cleaning their books as advised by SAMA," said a research note from Shuaa Capital on Wednesday. The sector appeared to shrug off the warning, with the banking index gaining 0.2 percent.