DUBAI, Oct 9 (Reuters) - Investors in Egypt’s stock market may welcome news of progress toward the country obtaining a $12 billion loan from the IMF, while bourses in the Gulf may be subdued on Sunday as investors await upcoming third-quarter corporate results.
The International Monetary Fund’s initial loan payment to Egypt will be about $2.5 billion, a senior IMF official said on Friday, adding that he hoped to secure board approval for the programme within the next month. IMF and Egyptian authorities are “making good progress” on talks with China, Saudi Arabia and some G7 countries to provide about $5-6 billion in additional bilateral financing, he added.
Cairo’s index of the top 30 most valuable stocks is now up 6 percent over the last month in anticipation of positive IMF news but volumes have been modest, suggesting there is room for more investors to allocate funds to equities if there is positive news.
In the Gulf, Saudi Arabia’s Jarir Marketing, the first Saudi retailer to publish third-quarter results, posted flat third-quarter net profit and noted a drop in its non-operating expenses.
The electronics and bookstore operator made a net profit of of 220 million riyals ($58.7 million) versus 218.5 million riyals a year earlier. The company said its estimated sales for the quarter fell 1.0 percent compared to the third quarter of 2015 - a sign of the government’s austerity policies hitting consumption - but added that “the company is commited to its expansion plan despite declines in sales.”
Analysts at Riyad Capital downgraded the stock to neutral with a price target of 118 riyals per share - still well above Jarir’s last close of 82.00 riyals on Thursday. (Reporting by Celine Aswad; Editing by Andrew Torchia)