Egyptian stocks advanced to a week high after the central bank started foreign-exchange auctions to avert a currency crisis. Some Saudi petrochemical shares rose after the nation announced a record 2013 budget.
Orascom Construction Industries, Egypt’s largest publicly traded company, climbed for a third day. Telecom Egypt Co. gained to the highest level in almost two months after it said it will receive a mobile-phone license. The EGX 30 climbed 0.5 percent to 5,442.37, the highest close since Dec. 20, at the close in Cairo. Trading volume was about 13 percent higher than the 20-day average, data compiled by Bloomberg show.
Shares gained as the central bank moved to ease pressure on Egypt’s foreign currency reserves, which plunged almost 60 percent to $15 billion, or the equivalent of three months of imports, since the revolt that ousted Hosni Mubarak almost two years ago. The regulator sold $75 million to banks at its debut auction today. President Mohamed Mursi yesterday called for unity to end more than a month of escalated protests.
“The market is reacting to the measures paving the way for the International Monetary Fund deal,” said Mohamed Radwan, head of equities at Pharos Holding for Financial Investment in Cairo. “The foreign-exchange auctions and sales taxes are seen as part of IMF measures, even though their impact on the people hasn’t been tested yet.”
Unrest in the past month led Egypt to ask the IMF to delay its decision on a $4.8 billion loan until the government has time to pursue social dialog on policies including a planned increase in taxes. The pound, subject to managed float, has weakened 1.2 percent this month while forward contracts show investors expect a 15 percent drop in 12 months. The EGX 30 Index has advanced 50 percent so far this year.
Orascom Construction Industries climbed 0.4 percent to 252.60 Egyptian pounds, the highest level since Dec. 19. Telecom Egypt, the Arab country’s monopoly fixed-line phone company, advanced 0.6 percent to 14.17 Egyptian pounds, the highest close since Nov. 6. The cost of the company’s mobile phone license will be determined in cooperation with a global adviser, the phone operator said in a regulatory filing today.
Advanced Petrochemicals Co. in Saudi Arabia gained 1.9 percent after the government yesterday unveiled a 2013 budget that raises expenditures by almost a fifth to a record 820 billion riyals ($219 billion).
The benchmark Tadawul All Share Index retreated 0.8 percent as global investors watch budget talks in Washington aimed at averting more than $600 billion in automatic tax increases and spending cuts that are set to take effect in January.
“The Saudi budget was expansionary as expected, but the Tadawul is exhibiting cautious behavior until U.S. cliff issues are seen to make some progress,” said Julian Bruce, the Dubai-based head of institutional trading at EFG-Hermes Holding SAE.
Elsewhere in the Gulf Cooperation Council, Dubai’s DFM General Index advanced 1.1 percent and Bahrain’s measure gained 1 percent. Abu Dhabi’s ADX General Index added 0.1 percent, Oman’s MSM30 Index climbed 0.8 percent and Kuwait’s gauge increased 0.1 percent. The Bloomberg GCC 200 Index of the biggest companies in the GCC decreased 0.3 percent as Qatar’s QE Index slipped 0.1 percent.
Israel’s TA-25 Index gained 0.2 percent at the close in Tel Aviv. The yield on the benchmark 5.5 percent bonds due 2022 fell three basis points to 3.63 percent, the lowest on record.