Egypt falls on currency worries

Egypt’s stock index fell 1.2 per cent yesterday because of concerns that its currency could be vulnerable, while Saudi Arabia and United Arab Emirates markets rose, buoyed in part by high oil prices.

Twenty-five of the 30 stocks in Egypt’s blue-chip index fell, as Egypt underperformed MSCI’s emerging markets index, which was almost flat. Middle East fund managers have turned negative towards Egyptian equities because of concern that the currency could weaken as global interest rates rise and foreign investors cut holdings of Egyptian Treasury bills, a Reuters poll showed on Sunday.

31pc of managers now expect to cut allocations to Egyptian equities and only 8pc » raise them in the next three months, the most negative balance for Egypt since February 2017. The Saudi Arabian index rose 0.5pc, lifted by banks and petrochemical stocks. National Commercial Bank jumped 2.6pc and Sahara Petrochemical added 1.3pc. Alinma Investment Co, a unit of Alinma Bank, signed an agreement with Saudi Real Estate Co to establish a real estate fund that will develop three sites in Riyadh with a value of 1.5 billion riyals ($409 million). Saudi Real Estate rose 0.9pc and Alinma Bank was up 1.3pc.

The Dubai index gained 0.5pc on the back of a 2.4pc rise by Emaar Properties, which in the past couple of weeks has been recovering from 30-month lows. Construction firm Drake & Scull rose 2.6pc; the loss-making company postponed last Thursday’s shareholder meeting to discuss its future to Oct. 4, citing the lack of a quorum. Abu Dhabi’s index closed 0.9pc higher as First Abu Dhabi Bank rose 2.1pc. Invest Bank added 6.4pc in light trade; sources told Reuters last week that the Sharjah government was considering a possible merger of Bank of Sharjah, Invest Bank and United Arab Bank .

In Qatar, the index edged 0.2pc lower, weighed down by banks. Commercial Bank fell 1.5pc and Qatar Islamic Bank dropped 1.0pc. The Bahrain index fell 0.3pc, with Khaleeji Commercial Bank plunging 8.9pc after it announced the resignation of its chief financial officer.