Markets look lacklustre; EFG Hermes Q2 could boost Egypt

Reuters
Traders work at Egypt's Stock Exchange in Cairo
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Traders work at Egypt's Stock Exchange in Cairo. File photo. REUTERS/Stringer (EGYPT - Tags: POLITICS …

DUBAI (Reuters) - Most Middle East bourses look likely to be quiet on Sunday, with little company-specific news to trade on and an end-of-week wobble on international markets offering little incentive for regional investors to bid up stocks.

Egypt’s benchmark may buck the hesitant trend, however – Cairo hit a new six-year peak on Thursday and bullish earnings from investment bank EFG Hermes should bolster sentiment.

EFG made a net profit of 188 million Egyptian pounds ($26.3 million) in the second quarter of 2014, up from a loss of 80 million pounds in the year-earlier period.

Three Islamist protesters were killed on Friday during clashes between police and demonstrators in Cairo, security forces said, but Egypt’s stock market has shown little reaction to periodic bouts of deadly unrest since the army ousted former president Mohamed Mursi.

Elsewhere, volatility on Dubai’s index has declined markedly – the measure has moved within a 230-point range in August, compared with a range of 1,204 points in July – and steadier trading appears likely to continue this week. Dubai ended Thursday at 4,813 points, up 38 percent in 2014.

“Another day of low-volume sideways session on Thursday signals a lack of confidence and brings consolidation just over the support zone of 4,760,” Shiv Prakash, a senior technical analyst at NBAD Research, wrote in a note.

“The intra-day trading range and the volume from open to close is getting reduced day by day.”

Any break below 4,760 could spark further selling towards the lower support range around 4,700, Prakash wrote. Looking upwards, the index must break above 4,935 for the trend to turn bullish, he added.

Abu Dhabi appears slightly more bullish, with banks leading the emirate's index to a fifth gain in six trading days on Thursday. That could push traders to switch cash to Abu Dhabi from Dubai, although some will likely to be tempted to book profits from First Gulf Bank’s record close on Thursday.

Qatar's market is likely to be disappointed by news that Mesaieed Petrochemical has not been added to the MSCI All-Country World Index.

Mesaieed shares surged 5.0 percent on Thursday after MSCI issued a statement saying the stock had been added to the index. But on Sunday, Mesaieed issued a bourse statement saying this was not in fact the case, contrary to what MSCI had originally announced.

Global equity markets seesawed on Friday after Ukraine said its artillery shelled a Russian armored column on Ukrainian soil in a report that raised fears of escalating tensions.

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