MIDEAST STOCKS-Cairo shares flat after rate hike, oil dents Saudi – Reuters

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* Deputy minister says hike temporary, tempering impact

* Petrochemicals weigh on Saudi Arabia

* Qatar sees thinnest trade since start of crisis

By Celine Aswad

DUBAI, July 9 Cairo’s stock market showed little
reaction on Sunday to an unexpected interest rate hike in Egypt,
tempered by comments by the deputy finance minister, while a
sharp drop in crude oil weighed on Saudi Arabia’s petrochemical
sector.

The central bank, faced with accelerating inflation, on
Thursday raised rates by 200 basis points for the second policy
meeting in a row, wrongfooting economists who had forecast no
change.

Deputy finance minister Mohamed Meait told Reuters on
Saturday the hike was only temporary.

Cairo’s blue chip index edged down 0.1 percent, a
far milder reaction than the 2.5 percent drop that followed a
previous rate hike on May 21.

Analysts at Naeem Brokerage said in a note that the market
might witness a slight temporary correction, adding that banks
might benefit because they expected higher investment income to
offset delinquencies and slower credit growth.

The largest listed lender, Commercial International Bank
added 1.4 percent on Sunday.

GULF

Shares of Advanced Petrochemical , the first Saudi
company to report second-quarter earnings, lost 0.7 percent
after only a 1 percent year on year increase in second-quarter
net profit.

Eight of the other 14 listed petrochemical makers declined,
helping drag the index 0.5 percent lower.

Riyad Capital expects net earnings for the petrochemicals
sector to shrink 13 percent year on year.

“We expect margins to be lower as product spreads continue
to weaken while shutdowns could constrain already impacted
sector,” it said in a note.

Qatar’s index edged down 0.2 percent in the lowest
daily traded volume since Saudi Arabia and three other Arab
states cut diplomatic and trade links with Doha on June 5.
Twenty shares rose while 15 shares.

In their statement late on Thursday, the four Arab states
said the initial list of 13 demands they had put to Qatar was
now void and they pledged further political, economic and legal
steps against the emirate.

Gulf funds not including Qataris were net buyers by a tiny
margin for the first time since the crisis erupted, bourse data
showed. They made up a little over 5 percent of the total market
turnover on Sunday. Locals made up a little under three-quarters
and were net buyers.

The Abu Dhabi index added 0.3 percent, as shares of
Dana Gas, which made up a little half of the total
market turnover on Sunday, rebounded 1.5 percent.

On Thursday Dana fell 1.4 percent after sources told Reuters
that London’s High Court planned to hold a full hearing in
September on efforts by the company to restructure $700 million
of Islamic bonds.

In neighbouring Dubai shares favoured by short-term retail
investors were the most active, with builder Arabtec
jumping 7.4 percent to 3.47 dirhams.

“The trend shall remain bullish towards the next barrier at
3.56 dirhams, where it may attract profit taking, but a break
over shall ignite aggressive buying until the previous highs of
4.00 – 4.20 dirhams,” said a note by NBAD Securities.

The stock has been strong since last week when Arabtec
announced winning projects worth 755 million dirhams.

HIGHLIGHTS

SAUDI ARABIA

* The index lost 0.5 percent to 7,167 points.

DUBAI

* The index edged up 0.04 percent to 3,403 points.

ABU DHABI

* The index added 0.3 percent to 4,411 points.

QATAR

* The index edged down 0.2 percent to 8,904 points.

EGYPT

* The index fell 0.1 percent to 13,355 points.

KUWAIT

* The index added 0.7 percent to 6,724 points.

BAHRAIN

* The index fell 0.06 percent to 1,310 points.

OMAN

* The index rose 0.3 percent to 5,135 points.
(Editing by Andrew Torchia and John Stonestreet)