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02/11
Saudi Arabian Shares Climb as Mubarak Resignation Eases Egyptian Tensions
By Mourad Haroutunian and Claudia Maedler – Egyptian President Hosni Mubarak reiterated he intends to stay on as president until elections in September, while delegating powers to Vice. Photographer: Khaled Dsouki/AFP/Getty Images
Play Video Feb. 10 (Bloomberg) — Egyptian President Hosni Mubarak announces he has delegated powers to his deputy, Omar Suleiman, while refusing to bow to the calls of protesters crammed into the center of Cairo demanding his immediate ouster. Mubarak speaks in a televised address to the nation. (This is an English translation and excerpt. Source: Bloomberg)
Egyptian anti-government demonstrators wave their national flag as they react following a speech by Egyptian President Hosni Mubarak in Cairo’s Tahrir Square. Photographer: Mohammed Abed/AFP/Getty Images
Egyptian anti-government demonstrators wave their shoes during a speech by Egyptian President Hosni Mubarak in Cairo’s Tahrir Square. Photographer: Pedro Ugarte/AFP/Getty Images
Saudi Arabia’s benchmark stock index rose to the highest in two weeks, led by Saudi Arabian Fertilizer Co., as Egypt’s President Hosni Mubarak stepped down and OPEC raised its oil demand forecast.
Safco, a unit of Saudi Basic Industries Corp., soared to the highest in more than two years. Mobile Telecommunications Co. of Saudi Arabia climbed after Bahrain Telecommunications Co. submitted an offer to acquire a stake in the company also known as Zain Saudi Arabia.
The Tadawul All Share Index gained 0.5 percent to 6,646.81, the highest intraday level since Jan. 29, at 1:21 p.m. in Riyadh. Yesterday, Egypt’s default risk dropped and the North African country’s bonds rallied.
“The de-escalation in Egypt is improving investor sentiment,” said Asim Bukhtiar, an equity analyst at Riyad Capital in Riyadh. “Gains in North American and European markets” are helping Saudi stocks, as well as signs that OPEC won’t increase oil production in the near term, which should support prices, he said.
Mubarak resigned and handed power to the military after protesters occupied central Cairo for the past 18 days, demanding an end to his 30-year reign. Stocks in the U.S. and Europe advanced yesterday, with the Standard & Poor’s 500 Index climbing 0.6 percent and the Stoxx Europe 600 gaining 0.4 percent.
Oil Prices
The Organization of Petroleum Exporting Countries raised estimates on Feb. 10 for the amount of crude it will need to produce this year and said prices don’t signal any supply shortage. Crude for March delivery declined $1.15 to $85.58 a barrel, the lowest settlement since Nov. 30. Oil closed at a two-year high of $92.19 a barrel on Jan. 31. Saudi Arabia holds about 20 percent of the world’s proven oil reserves.
Safco gained 2.6 percent to 191.25 riyals, the highest since September 2008. Saudi Basic, the world’s largest petrochemical maker, rose 0.5 percent to 104.75 riyals. Zain Saudi advanced 0.6 percent to 7.95 riyals as Batelco said it offered to by Zain Group’s 25 percent stake in the company.
The cost of insuring Egyptian government debt fell 13 basis points to 324 yesterday, according to CMA prices. The Market Vectors Egypt Index ETF, an exchange-traded fund that holds Egyptian shares, gained 4.5 percent in New York. Egypt’s 5.75 percent dollar bond due 2020 rebounded, cutting the yield by 15 basis points to 6.35 percent, according to data compiled by Bloomberg.
Egypt Bourse
Egypt’s stock exchange in Cairo has been shut for two weeks amid the protests. The country’s benchmark stock index lost 16 percent during the week that ended Jan. 27.
While the stock exchange is scheduled to open tomorrow, “what happens today is very crucial for that decision,” Finance Minister Samir Radwan said in a Bloomberg Television interview yesterday, before Mubarak stepped down.
Egypt’s protests began Jan. 25, inspired by an uprising that ousted Tunisian President Zine El Abidine Ben Ali on Jan. 14. Tunisia’s main equity index has lost 11 percent since Dec. 17, when Mohamed Bouazizi, a street vendor, set himself on fire, spurring the revolt against Ben Ali’s 23-year rule.
Saudi Arabia’s exchange is the only Arab market open on Saturdays and tracked by Bloomberg.
To contact the reporters on this story: Mourad Haroutunian in Riyadh at mharoutunian@bloomberg.net; Claudia Maedler in Dubai at cmaedler@bloomberg.net
To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net