x Abu Dhabi, UAEFriday 21 July 2017

Merger talk boosts Hermes

UAE bourses dipped into the red to end the session lower yesterday, in what analysts said is inline with their expectations of some investor pullback ahead of the end of the first quarter after three months of gains.

The new headquarters of the Egypt-based investment bank EFG-Hermes is seen on the outskirts of Cairo October 19, 2010. REUTERS/Asmaa Waguih (EGYPT - Tags: BUSINESS)
The new headquarters of the Egypt-based investment bank EFG-Hermes is seen on the outskirts of Cairo October 19, 2010. REUTERS/Asmaa Waguih (EGYPT - Tags: BUSINESS)

EFG-Hermes shares surged in Cairo after it announced plans to create a regional investment bank with Qatar's QInvest.

The Egyptian investment bank was the biggest gainer on the EGX30, gaining 5 per cent to 13.43 Egyptian pounds each, although the broader index fell 1 per cent to 4,908.43.

UAE bourses dipped to end the session lower yesterday, which analysts say is in line with their expectations of some investor pull-back ahead of the end of the first quarter.

The Abu Dhabi Securities Exchange General Index closed down 0.4 per cent at 2,577.40. It is up 7.29 per cent for the year to date. The Dubai Financial Market General Index closed down 0.82 per cent at 1,655.46. Stocks on the bourse have risen 22.32 per cent since January.

Fadi Al Said, the senior fund manager at ING Investment in Dubai, said investors were digesting strong returns for the year.

"It's normal to see some consolidation as market steam cools down. The most important thing to see is if the [Dubai] index holds on to the gains at around 1,650, or between 1,650 to 1,700. The index has risen from around 1,300 at the start of the year. Now the hope is that there will be some horizontal consolidation."

Horizontal consolidation is when a market enters a period of operating with a narrow range, without any aggressive rises or falls in volumes or prices.

National Central Cooling, a Dubai-listed company known as Tabreed, was one of the biggest gainers, closing up 1.94 per cent at Dh1.58 a share. Yesterday's rise came amid rumours the company was poised to release a hefty dividend. The stock has risen 218.5 per cent so far this year.

lmiller@thenational.ae