* Egyptian stocks jump 3.1 pct in heavy trade
* Foreign investors are aggressive buyers
* Qatar up after 2017 budget announcement
* Saudi SABIC drops on lower cash dividend
* Dubai, Abu Dhabi weakened by profit-taking
By Celine Aswad
DUBAI, Dec 19 Egypt's stock index
surged 3.1 percent in heavy trade on Monday as the Egyptian
pound depreciated against the U.S. dollar, prompting more buying
by foreign funds, while Gulf bourses diverged.
Twenty-seven of the 30 most liquid Egyptian shares rose,
taking the index to a fresh eight-year high, with Telecom Egypt
and Global Telecom Holding each jumping to
their 10 percent daily limits.
The Egyptian pound was being bought for 19 pounds per
dollar against around 18.8 earlier in the day on the back of
higher demand for the greenback amid a shortage at banks,
bankers told Reuters.
Foreign investors were net buyers of Egyptian stocks by a
modest margin, bourse data showed. Overall, many investors
consider currency weakness a positive for the stock market in
the short term because it makes prices more attractive for
foreign investors, and may drive local funds into stocks as a
hedge against inflation.
"The dollar rate is keeping up the appetite" for stocks
among foreign funds, said Wafik Dawood, portfolio manager at
Also boosting sentiment was news that Banque Misr had signed
a memorandum of understanding with Industrial and Commercial
Bank of China for a $500 million loan aimed at
increasing dollar liquidity and financing joint Egyptian-Chinese
Allen Sandeep, director of research at Cairo's Naeem
Brokerage, said the International Monetary Fund's three-year,
$12 billion bailout programme for Egypt, finalised in early
November, was continuing to buoy the stock market.
"Historically, any time an emerging market won an IMF
bailout, stock markets soared - one case study could be India's
bailout in 1991, because structural change on both the monetary
and fiscal level will eventually be prosperous for the economy."
The index in Qatar, which was closed for a public
holiday on Sunday, rose 0.5 percent but finished well below its
intra-day high. Qatari Investors Group was the top
performer, jumping 9.9 percent.
On Thursday Qatar published a 2017 state budget that
projected a deficit of 28.3 billion riyals ($7.8 billion), much
smaller than the originally projected 2016 deficit, and total
spending of 198.4 billion riyals, down from 202.5 billion.
Although that is slightly contractionary, it is less so than
the 2016 budget, and the government plans to increase capital
spending next year. It did not announce any major new austerity
measures; the budget's conservative oil price assumption of $45
a barrel suggests the government has plenty of room to meet its
targets next year.
In Saudi Arabia, the index was dragged 0.9 percent
lower by a 3.7 percent drop in the largest listed stock, Saudi
Basic Industries, after the company announced a lower
cash dividend for the second half of this year compared to a
The negative sentiment spilled into some other blue chips,
with National Commercial Bank declining 1.4 percent.
But builder Abdullah Al Khodari was the top
performer, surging 9.3 percent in unusually heavy trade. The
company, which has many projects with the government, may
benefit from increased work in the coming year if the kingdom's
2017 budget includes an increase in construction expenditure, as
many analysts expect.
Saudi Cable Co, which rose 2.5 percent on Sunday
after saying its Turkish subsidiary had won a $50 million order,
climbed a further 3.3 percent.
Dubai's main index lost 0.6 percent to 3,532 points
in a second consecutive day of thin trade, retreating further
from technical resistance on the August peak of 3,624 points,
which it tested and failed to break decisively last week. Emaar
Properties lost 0.9 percent.
Blue chips were weak in Abu Dhabi, where the index
slipped 0.4 percent; telecommunications operator Etisalat
lost 1.6 percent.
* The index fell 0.9 percent to 7,077 points.
* The index jumped 3.1 percent to 11,752 points.
* The index lost 0.6 percent to 3,532 points.
* The index fell 0.4 percent to 4,479 points.
* The index gained 0.5 percent to 10,272 points.
* Kuwait's index rose 0.1 percent to 5,657 points.
* The index inched up 0.02 percent to 5,729 points.
(Editing by Andrew Torchia/Mark Heinrich)