Egypt’s benchmark index rose to the highest since January 2011, leading gains in the Middle East, as the U.S. Federal Reserve’s plan to buy mortgage securities outweighed concern over violent protests in the region.
EFG-Hermes Holding SAE rallied to the highest level since May after shareholders approved the creation of an investment bank with Qatar’s QInvest. In Dubai, Emaar Properties PJSC (EMAAR), developer of the world’s tallest tower, climbed 3.2 percent. Egypt’s EGX 30 Index surged 2.8 percent to 5,821.75, the highest since January 2011, at the close in Cairo. The DFM General Index (DFMGI) rose 1.4 percent, Abu Dhabi’s index increased 0.8 percent and the Bloomberg GCC 200 Index (BGCC200) added 0.1 percent.
“Middle East and North Africa markets are shrugging off any concerns relating to disparate Islamic protests and focusing instead” on the Fed’s stimulus plan, said Julian Bruce, the Dubai-based director of institutional sales trading at EFG- Hermes Holding SAE. “The Gulf Cooperation Council is off to a solid start as overall sentiment improves.”
Global stocks climbed after the Fed said Sept. 13 it would embark on a third round of quantitative easing with open-ended purchases of $40 billion of mortgage debt a month as it seeks to boost growth and reduce unemployment. The MSCI World Index (MXWO) rose 2.7 percent last week, and crude oil for October delivery advanced by the same amount in New York. Gulf Arab oil exporters, including the United Arab Emirates and Saudi Arabia, supply about a fifth of the world’s oil.
Protests against a film denigrating Islam eased in the Middle East following violence in Libya, Tunisia, Sudan and Yemen. Clashes in Cairo’s Tahrir Square stopped yesterday after Egypt’s main Islamist groups called for calm. Police secured the square and arrested 220 people, the country’s Interior Ministry said in a statement. Egypt also secured $2 billion of economic aid from Turkey, according to an e-mailed statement from the Finance Ministry.
Demonstrations over the weekend “weren’t that big, it was more or less angry people on the streets,” said Teymour El- Derini, Cairo-based director of MENA sales at Naeem Brokerage. The rally in global markets also helped turn investor sentiment to “once again very positive and the market is moving in one direction.”
EFG-Hermes gained 3.5 percent to 13.4 Egyptian pounds, the highest since May 9. Shareholders also approved terms of the QInvest agreement including a condition that the Cairo-based company won’t compete with the entity to be established in Doha and will cede to it the EFG-Hermes trademark within a year of completing the transaction.
Dubai, the second-largest of seven sheikhdoms that make up the U.A.E., relies on foreign trade, tourism and property for growth. About 221 million shares traded in the emirate today, compared with a 12-month daily average of 143 million.
Emaar increased to 3.58 dirhams, the highest since January 2011. The U.A.E.’s biggest publicly traded developer plans to build a hotel in Dubai near Burj Khalifa, the world’s tallest tower, to capitalize on the city’s hospitality boom.
Aldar Properties PJSC (ALDAR) and Sorouh Real Estate Co. (SOROUH), Abu Dhabi’s biggest developers, rose 2.4 percent and 2.5 percent, respectively, to the highest since March as the emirate asked state employees to live in the U.A.E. capital within a year.
Oman’s MSM30 Index (MSM30) advanced 0.6 percent and Bahrain’s measure rose 0.3 percent. Qatar’s benchmark increased 0.4 percent. Saudi Arabia’s Tadawul All Share Index (SASEIDX) and Kuwait’s gauge slipped 0.1 percent. Israel’s market was closed for a holiday.
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