Egypt resumes stock rally, Saudi Arabia extends gains

Tuesday 27-01-2015 12:54 PM
Egypt resumes stock rally, Saudi Arabia extends gains

A trader watches his monitor at the Egyptian stock exchange in Cairo April 1, 2014. REUTERS/Mohamed Abd El Ghany

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DUBAI, Jan 27 (Reuters) - Egypt's stock market turned bullish again in early trade on Tuesday after a short bout of profit-taking, while Saudi Arabia's bourse edged up on the back of banking stocks.

The Cairo benchmark rose 1.3 percent as most stocks were in the black. Property firm Medinet Nasr Housing and Development led gains, surging 5.1 percent as Egypt's central bank continued the gradual depreciation of the pound.

The pound slipped to 7.43 per dollar from 7.39 at a central bank auction on Monday, to the weakest level it has been allowed to reach since auctions began in December 2012. It was the sixth consecutive official depreciation in the past week, prompted by the gap between the black market and the official rate.

Investors are betting that Egyptians will turn to property as a hedge against a weaker currency, analysts have said.

Saudi Arabia's index edged up 0.5 percent as lenders Samba Financial Group and Al Rajhi rose 2.2 and 0.8 percent respectively.

Kuwait's Global brokerage issued a bullish report on the kingdom's banking sector on Monday, saying recent regulations restricting consumer-related fees would have only a short-term negative impact on banks' profitability.

"Expecting an increase in (U.S.) Fed rates in the third quarter of 2015, we see net interest margins following suit," it said. "Market erosion has also unearthed some valuable gems, which may not have been there otherwise."

Shares in Saudi Arabian Mining Company (Ma'aden) surged 4.1 percent after it published on Monday a report on the use of proceeds from its 5.6 billion riyal ($1.5 billion) rights issue, indicating that its bauxite and alumina project was nearly complete. (Reporting by Olzhas Auyezov; Editing by Andrew Torchia)

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