DUBAI: Egypt’s index hit a three-month high on Tuesday and banks lifted the Dubai and Abu Dhabi benchmarks as most Middle East markets advanced, with a turnaround in oil prices and global stocks boosting sentiment.
Orascom Telecom rose 5.2 percent on more interest from small investors since its share dilution this week, helping lift the index to its highest close since Oct. 29.
“Orascom Telecom is creating a surge in the market,” said Teymour El-Derini from Naeem Brokerage.
Abu Dhabi Commercial Bank was the UAE’s standout performer, rising 7.6 percent and taking its gains to 40 percent since plunging to a 7-1/2 year intraday low last week.
The lender had reported a $327 million quarterly loss, but investors are now reacting positively to its attempt to clean up its balance sheet and follows similar moves by Saudi lenders.
“In the past, ADCB’s management strategy was very aggressive and it had a lot international exposure,” said Germaine Benyamin, an analyst at HC brokerage in Dubai.
ADCB’s surge helped Abu Dhabi’s index rise 1 percent to a two-week high in its fifth straight gain.
Dubai’s index rose 1.5 percent, as Emirates NBD jumped 4.6 percent, after closing at a life-low on Sunday on concerns about its exposure to indebted Dubai firms.
“UAE banks are taking huge provisions and the expectations are for Emirates NBD to do the same, which is weighing on the stock,” said Benyamin. “The bank’s balance sheet is overstretched, but if it does the same as ADCB to show it will be more conservative in the future, then this could be positive for the stock.”
Strong US manufacturing data has boosted hopes for a global economic recovery, pushing US markets higher overnight. Oil is also stable, rising 0.9 percent to $75.08 at 1339 GMT, trimming losses from a 12.4-percent, 23-day decline.
Oil’s rise helped Saudi Basic Industries Corp. add 0.9 percent, with the Tadawul All-Share Index (TASI) advancing for a second day in three.
The market saw losses in seven sectors, with the biggest loss in the agriculture and food industries sector, which was down 1.13 percent. Sector gains ranged from 0.21 percent in the industrial investment sector to a gain of 1.08 percent in the energy and utilities sector. Overall market breadth was negative, with 40 advancers and 70 decliners registering an AD ratio of 0.57, the Financial Transaction House (FTH) said in its daily market commentary.
With oil prices up for a second day in a row, investor confidence was being restored to the market, with liquidity obviously seeing a big improvement, hitting SR 2.9 billion, on Tuesday, the FTH said.
National Bank of Kuwait added 1.8 percent, climbing for a second day since the lender reported a four-fold rise in quarterly profit, but the index was flat.