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

Updated 31 January 2013

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.

Saudi Arabia, Russia and China give EU trade reforms thumbs down at WTO

Updated 3 min 36 sec ago

Saudi Arabia, Russia and China give EU trade reforms thumbs down at WTO

  • China is suing US and EU at WTO
  • Kingdom warns new rules are concerning

The EU’s new rules against countries dumping cheap goods on its market got a rough ride at a World Trade Organization meeting, where China, Russia and Saudi Arabia led a chorus of disapproval, a trade official said on Thursday.

The EU, which is in a major dispute with China about the fairness of Chinese pricing, introduced rules last December that allow it to take into account “significant distortions” in prices caused by government intervention.

A Chinese trade official told the WTO’s anti-dumping committee that Beijing had deep concerns about the new methodology, saying it would damage the WTO’s anti-dumping system and increase uncertainty for exporters, an official who attended the meeting said.

China argued that the concept of “significant distortion” did not exist under WTO rules, and the EU should base its dumping investigations on domestic prices in countries of origin, such as China.

The EU reformed its rules in the hope they would allow it to keep shielding its markets from cheap Chinese imports while fending off a Chinese legal challenge at the WTO.
China said that when it joined the WTO in 2001, the other member countries agreed that after 15 years they would treat it as a market economy, taking its prices at face value.

But the US and the EU have refused, saying China still subsidises some industries, such as steel and aluminum, which have massive overcapacity and spew vast supplies onto the world market, making it impossible for others to compete.

China is suing both the US and the EU at the WTO to try to force them to change their rules.

Legal experts say the dispute is one of the most important in the 23-year history of the WTO, because it pits the major trading blocs against each other with fundamentally opposing views of how the global trade rules should work.

In the WTO committee meeting, Saudi Arabia said the new rules were very concerning, and it challenged the EU to explain how EU authorities could ensure a fair and objective assessment of “significant distortion.”

Russia said the EU rules violated the WTO rulebook and certain aspects were unclear and created great uncertainty for exporters. Bahrain, Argentina, Kazakhstan and Oman also expressed concerns.

But a US trade official said the discussion showed that appropriate tools were available within the WTO to address distortions affecting international trade.