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MIDEAST STOCKS-Egypt's Orascom Telecom surges; Cairo rebounds
March 7, 2013 / 1:47 PM / 5 years ago

MIDEAST STOCKS-Egypt's Orascom Telecom surges; Cairo rebounds

DUBAI, March 7 (Reuters) - Egypt’s Orascom Telecom rebounded on Thursday after a newspaper report said Algeria was near to resolving a long-running dispute with the Cairo-listed firm’s Algerian unit Djezzy.

Shares in Orascom Telecom jumped 7.6 percent to a three-week high. They had slumped to seven-week low on Wednesday after the company announced a widening fourth-quarter net loss.

Algeria will sign an agreement next week with Orascom’s parent company Vimpelcom regarding Djezzy, an Algerian newspaper reported.

Djezzy has been embroiled in a protracted dispute with the government, during which the firm has been hit by back-tax demands, threatened with nationalisation, and put under criminal investigation.

Traders in Cairo said the agreement could pave the way for Algeria to buy a stake in Djezzy.

Cairo’s index rose 2 percent, climbing for a second day since Tuesday’s 2013 low as bargain hunters returned.

A possible delay in upcoming parliamentary elections also boosted market sentiment.

Egyptian court ordered the cancellation of President Mohamed Mursi’s decree calling parliamentary elections, forcing a likely delay to polls due to start in April.

“It gives time for the opposition to reconcile and find a resolution on common ground,” said Mohamed Radwan, director of international sales at Pharos Securities.

Gainers outnumbered losers 25 to five.

In Dubai, renewed buying of property-related stocks helped the emirate’s index climb 0.4 percent, rebounding from Wednesday’s four-week low.

Investors have booked gains since Dubai hit a 29-month high in late February.

Shares in Dubai’s bellwether Emaar Properties gained 1.1 percent. Builder Arabtec snapped a five-session losing streak, closing 3.9 percent higher.

The stock is down 28.3 percent since the company announced plans to raise its capital through a 4.8 billion dirhams ($1.31 billion) rights issue and a 1.7 billion dirhams convertible bond.

“If they want to relieve stress on the stock, they should increase the value of the convertible bond and decrease the value of the rights issue,” said Anastasios Dalgiannakis, institutional trading manager at Mubasher. The convertible bond would bring in new investors, he added.

Banks weighed on the neighbouring Abu Dhabi index, which fell 1 percent. The market declined 2.4 percent this week, down from Feb. 27’s 40-month peak.

First Gulf Bank dropped 4.9 percent after reaching its ex-dividend date. Abu Dhabi Islamic Bank fell 1.7 percent.

In Kuwait, the index gained 0.3 percent, rising to a near 25-month high.

“People are already forecasting Q2 and if the trend continues, we will have another bullish rally,” said Fouad Darwish, head of brokerage at Global Investment House.

“There are things coming together in Kuwait. The biggest stimulant will be government projects.”

Along with a more stable political backdrop after months of turmoil, investors are optimistic the government will kick-start long-delayed infrastructure projects. These are part of a 30 billion dinars ($107 billion) development plan due to end in 2014.

THURSDAY‘S HIGHLIGHTS

EGYPT

* The index rose 2 percent to 5,366 points.

DUBAI

* The index climbed 0.4 percent to 1,882 points.

ABU DHABI

* The index fell 1 percent to 2,971 points.

KUWAIT

* The index rose 0.3 percent to 6,575 points.

QATAR

* The index climbed 0.1 percent to 8,506 points.

OMAN

The index slipped 0.1 percent to 5,993 points.

BAHRAIN

* The index climbed 0.2 percent at 1,100 points.

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