CAIRO/DUBAI: Egypt’s main index hit a seven-week high on Thursday as concerns eased that demonstrations planned for Cairo the following day could turn violent and wreak further damage on fragile investor sentiment.
The EGX 30 rose 1.1 percent to its highest close since April 7.
Youth and democracy movements are planning a big demonstration in Tahrir Square on Friday to call for a faster move to democracy following the end of former president Hosni Mubarak’s 30-year rule in February.
Mubarak and his sons were ordered on Tuesday to stand trial for the killing of protesters.
A Cairo trader said this move shows the government is reacting to the threat of Friday’s protests, while the likely security threat posed by the demonstrations may have been exaggerated to discourage a large turnout.
"From what I see in the market, it seems nothing bad shall happen tomorrow," the trader added.
The EGX 30 is up 8.2 percent in May as foreign states including Saudi Arabia and the United States came to the aid of Egypt’s military-backed interim government with offers of sovereign loan guarantees, soft loans and grants.
Property developer Talaat Moustafa climbed 5.8 percent and rival Palm Hills rose 5.7 percent.
Signals that Egypt’s government is searching for a solution to legal disputes over past sales of state land for development has boosted property stocks.
Oman’s index fell 0.8 percent, slumping to a 17-month low. Renaissance Services was the main drag, tumbling 4.9 percent. Company officials met with analysts on Tuesday and issued a bleak outlook for 2011, causing selling pressure, an analyst said.
Renaissance pulled a $500 million initial public offering of oilfield services unit Topaz in March. The firm said it would review the timing of the IPO later this year.
"Renaissance is back to the same level before Topaz — it seems investors are convinced the IPO will not go through," said Adel Nasr, United Securities brokerage manager. "We have some selling because traders are worried the market could continue downward —they are selling to stop losses."
Elsewhere, Qatar’s index rose 0.7 percent, easing from Wednesday’s one-month low, but some traders cut their exposure after Qatari FIFA presidential candidate Mohamed bin Hammam was ordered to face an ethics hearing, the latest blow to soccer’s ruling body.
Qatar, which won a FIFA vote to host the 2022 World Cup, has also denied claims from Britain’s Sunday Times the country paid two members of FIFA’s executive committee.
"Qatar was a good technical rebound," said Sebastien Henin, portfolio manager at The National Investor. "It went down due to uncertainty on the World Cup bid — it is a risk, even if it is small."
Investors are also disappointed Qatar has yet to raise foreign ownership limits on shares, a move that would boost the country’s chances of being upgraded to emerging market status by MSCI in the index compiler’s June review.
Barwa Real Estate and Masraf Al Rayan, gained 0.5 and 1.8 percent respectively.
