Egypt rebounds from four-week low; Gulf stock markets mixed

Updated 31 January 2013
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Egypt rebounds from four-week low; Gulf stock markets mixed

DUBAI: Egypt’s bourse recovered yesterday from a four-week low as bargain hunters shrugged off political unrest, while Gulf markets were mixed.
Cairo’s main index rose 1.5 percent, halting two sessions of sharp declines after the government declared a state of emergency in three cities on the Suez Canal.
“The market rebound today is a correction after a sharp decline yesterday, but we expect the bourse will break 5,500 again to target 5,300 next week,” said Ahmed Sharaby, Cairo-based technical analyst at Mawarid Egypt.
Heavyweight Orascom Construction Industries and Telecom Egypt each climbed 0.8 percent. Orascom Telecom gained 2.8 percent.
However, investor concerns still linger as two more protesters were shot dead before dawn near Cairo’s central Tahrir Square on the seventh day of a wave of unrest.
“There’s a psychological pressure (on investors) from the political situation,” said Sharaby.
Elsewhere, petrochemical stocks helped lift Saudi Arabia’s index as better-than-forecast European data spurred optimism for the global economy and drove oil prices higher.
Brent crude reached its highest level in three and a half months yesterday, passing $ 115 a barrel.
Saudi Basic Industries added 0.5 percent, National Industrialization (TASNEE) climbed 0.4 percent and Rabigh Refining and Petrochemical gained 1.2 percent.
Saudi petrochemical stocks tend to track oil prices, with crude impacting their bottom line. Oil is also seen as a proxy for global economic activity and therefore demand for petrochemical products.
The Kingdom’s index gained 0.2 percent, its third gain in the last five sessions.
In the UAE, Dubai’s Emaar Properties hit a 39-month high as investors bet the developer will announce market-pleasing earnings and dividends for 2012.
Emaar climbed 1.5 percent to AED 4.88, its highest close since October 2009. The intraday peak of that month — AED 5.01 — is a major resistance level for the stock.
“Foreign flows continue ... the market is predominantly led by Emaar — we will need to see earnings to see if the rally is justified,” said Anastasios Dalgiannakis, institutional trading manager at Mubasher.
Analysts polled by Reuters forecast Emaar to post a 23.8 percent drop in fourth-quarter profit. Some traders expect the developer will announce its results today, although it has not made an official announcement to that effect.
Shares in courier Aramex jumped 5.1 percent to AED 2.27, its highest close since October 2010, on a technical breakout. It broke through a resistance at AED 2.22, the peak of Dec. 4.
Dubai’s index rose 1.1 percent to — its highest close since March 2010 — while Abu Dhabi’s benchmark climbed 0.4 percent to reach a similar milestone.
First Gulf Bank gained 0.8 percent after posting an estimate-beating 12-percent rise in fourth-quarter profit. The bank proposed a cash dividend of 0.83 dirhams per share for 2012.
In Qatar, the index climbed 0.4 percent.
Elsewhere, Kuwait’s index slipped 0.1 percent, halting a 10-session rally.


IMF warns G20 economic leaders that tariffs hurting global economy

Updated 13 min 2 sec ago
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IMF warns G20 economic leaders that tariffs hurting global economy

BUENOS AIRES: The International Monetary Fund (IMF) warned world economic leaders on Saturday that a recent wave of trade tariffs would significantly harm global growth, a day after US President Donald Trump threatened a major escalation in a dispute with China.
IMF Managing Director Christine Lagarde said she would present the G20 finance ministers and central bank governors meeting in Buenos Aires with a report detailing the impacts of the restrictions already announced on global trade.
“It certainly indicates the impact that it could have on GDP (gross domestic product), which in the worst case scenario under current measures...is in the range of 0.5 pct of GDP on a global basis,” Lagarde said at a joint news conference with Argentine Treasury Minister Nicolas Dujovne.
Her warning came shortly after the top US economic official, Treasury Minister Steven Mnuchin, told reporters in the Argentine capital there was no “macroeconomic” effect yet on the world’s largest economy.
Long-simmering trade tensions have burst into the open in recent months, with the United States and China — the world’s No. 2 economy — slapping tariffs on $34 billion worth of each other’s goods so far.
The weekend meeting in Buenos Aires comes amid a dramatic escalation in rhetoric on both sides. Trump on Friday threatened tariffs on all $500 billion of Chinese exports to the United States.
US Treasury Secretary Steven Mnuchin will try to rally G7 allies over the weekend to join it in more aggressive action against China, but they may be reluctant to cooperate because of US tariffs on steel and aluminum imports from the European Union and Canada, which prompted retaliatory measures. .
The last G20 finance meeting in Buenos Aires in late March ended with no firm agreement by ministers on trade policy except for a commitment to “further dialogue.”
German Finance Minister Olaf Scholz said he would use the meeting to advocate for a rules-based trading system, but that expectations were low.
“I don’t expect tangible progress to be made at this meeting,” Scholz told reporters on the plane to Buenos Aires.
Mnuchin told reporters on Saturday that he has not seen a macroeconomic impact from the US tariffs on steel, aluminum and Chinese goods, along with retaliation from trading partners.
But he said there have been microeconomic effects on individual businesses, he said, adding that the administration was closely monitoring these and looking at ways to help US farmers hurt by retaliatory tariffs.
The US dollar fell the most in three weeks on Friday against a basket of six major currencies after Trump complained again about the greenback’s strength and about Federal Reserve interest rate rises, halting a rally that had driven the dollar to its highest level in a year.