DUBAI / Reuters
Egypt’s stock market outperformed its Gulf peers on Wednesday on the back of strong first-quarter earnings and positive news from a real estate developer, while Saudi Arabia saw increased activity as traders took positions ahead of Ramadan.
Egypt’s index rose 1.0 percent as real estate firm Sixth of October Development (SODIC) jumped 4.2 percent to a four-month high in its heaviest trade since May 2014.
The company’s chief executive told Reuters on Wednesday it planned to buy new land to the north and west of Cairo as part of an expansion plan. In total, SODIC would acquire land worth 600 million Egyptian pounds ($33.2 million). The value of contracted sales during the first quarter reached 1.2 billion pounds, beating the company’s target of 1 billion pounds. On Tuesday SODIC reported net profit of 211 million pounds for the first quarter, four times its year-ago profit.
The positive sentiment spilled over into shares of other property developers with the largest by market value, Talaat Mostafa Group, adding 0.8 percent, recovering slightly from the previous day’s heavy loss on news that MSCI will remove the stock from its main Egypt index.
Ezz Steel rose 2.1 percent after one of its subsidiaries reported an almost tripling in first-quarter net income compared with a year ago. Meanwhile, the Saudi index added 0.1 percent in the heaviest trading volume since January as much activity focused on second- and third-tier stocks. “Investors are taking positions or exiting them ahead of the holy month of Ramadan,” said a Jeddah-based trader. Ramadan is expected to start on May 27.
Of the 20 most valuable companies by market capitalisation, only eight rose, with Almarai and Makkah Construction Development each gaining 1.7 percent. The Dubai index rose 0.5 percent as DAMAC Properties extended the previous session’s 2.9 percent gain to add a further 2.5 percent.
Its shares have been rising since index compiler MSCI said on Monday that it would add the stock to its UAE index on June 1. Arqaam Capital estimated the inclusion would bring $68mn of passive fund inflows into the stock. Abu Dhabi’s index edged up 0.3% as mid-sized Eshraq Properties, the most heavily traded share, climbed 2.8 percent and Abu Dhabi National Energy jumped 3.5 percent. Qatar’s index rose 0.2 percent with its main support from blue-chip banks; Qatar National Bank added 1.0 percent.