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Egypt shares rise to 35-month high on stimulus
Reuters
File - Traders work at Egypt's Stock Exchange in Cairo. (REUTERS/Stringer)
File - Traders work at Egypt's Stock Exchange in Cairo. (REUTERS/Stringer)
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DUBAI: Egyptian shares rose Tuesday, lifting the main index to a 35-month high, after the finance minister announced plans for a second economic stimulus package worth around 30 billion Egyptian pounds ($4.4 billion).

The spending, 25 percent more than previously announced and financed partly with aid from the Gulf, is to begin in January. Finance Minister Ahmad Galal said 20 billion pounds would be spent on public investment, while the rest would cover a public sector minimum wage.

Cairo’s benchmark index rose 1.2 percent to 6,720 points, its highest level since January 2011, before President Hosni Mubarak was ousted.

“The market is reacting positively to the second stimulus plan and the confidence that they have the funds for this,” said Islam Batrawy, Cairo-based head of regional equity sales at NBK Capital.

Juhayna Food Industries jumped 5.5 percent and Commercial International Bank gained 1.0 percent.

In Saudi Arabia, shares in Saudi Hollandi Bank climbed 4.5 percent to their highest close since Oct. 30 after the lender said it had planned to boost its capital by 20 percent next year through a bonus share issue.

After rising almost 10 percent in each of the past two days, PetroRabigh showed signs of losing steam, gaining only 5.3 percent. It has been climbing since it said its parent companies agreed to cut international marketing fees for PetroRabigh’s products by a third over a five-year period.

The overall Saudi market stayed quiet; the main index gained just 0.3 percent to 8,412 points, a five-year high. The market is up 23.7 percent year-to-date, heading for its best year since 2009.

Mohammad Omran, president of Riyadh-based private firm Gulf Centre for Financial Consultancy, said the market could target the 8,500-point level by year-end.

“Petrochemicals, telecoms and banking will be the leading sectors in the coming year, but growth in banks will be modest.”

In Abu Dhabi, banking shares that lagged the recent leg up by Dubai’s bourse played catch-up. The Abu Dhabi index climbed 1.3 percent to its highest level since September 2008; Abu Dhabi Commercial Bank rose 5.6 percent.

“There are a lot of investors looking for bulk buying in the banking sector as a whole on speculation about earnings and dividends,” said Hisham Khairy, head of trading for the institutional desk at MENA Corp. Companies will announce annual dividends and earnings after mid-January.

Waha Capital surged 14.9 percent to its highest level since September 2008 after the company said it would vote in favor of AerCap Holdings’ $5.4 billion acquisition of American International Group’s aircraft leasing unit.

The company is AerCap’s largest shareholder with a 26.3 percent stake, though if the deal is completed, Waha’s stake would be reduced to about 14 percent, it said.

Oman’s market gained 0.5 percent, outperforming most of the Gulf. BP announced Monday that it would drill some 300 wells for gas under the Omani desert over the next 15 years in a $16 billion project that may give a significant boost to the economy, which is about $80 billion in size.

 
A version of this article appeared in the print edition of The Daily Star on December 18, 2013, on page 5.
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