Bets on property lift Egypt's bourse; banks support Qatar

Expectations of higher demand for property in response to higher inflation lifted Egypt's real estate stocks on Tuesday, while Qatar's biggest bank rose ahead of the top lender's second-quarter earnings statement. Egypt's bourse climbed 1.4 percent to a three-week high of 8,429 points as shares in property developer Talaat Moustafa Group jumped 5.0 percent and were the main support.

Other property firms also posted strong gains: Egyptians For Investment & Urban Development surged 6.5 percent, SODIC rose 3.7 percent and Medinet Nasr for Housing and Development was up 3.0 percent. The jump in real estate stocks followed the government's decision last Friday to raise fuel prices by up to 78 percent in order to curb its swelling budget deficit. This is expected to boost inflation at least temporarily - Egyptian Treasury bill yields rose in response - and market players think Egyptians will use property as a hedge against inflation.

"People have digested the recent structural adjustment to the government budget, which clearly put real estate as gainers since Egypt's economy will face some inflationary pressure," said Osama Mourad, chief executive of Arab Finance Brokerage. "It is a no-brainer that real estate is bound to move forward." Qatar's bourse also gained 1.4 percent on the back of banks as the country's biggest lender, Qatar National Bank (QNB) , prepared to publish its second-quarter results. Shares in QNB rose 1.7 percent, Islamic lender Masraf Al Rayan jumped 3.6 percent and Qatar Islamic Bank gained 2.9 percent.

After trading closed, QNB, whose results are generally seen as a bellwether for the sector's performance, said its profit rose 1.5 percent, beating the expectations of analysts who had forecast a 2.7 percent decrease. Bourses in the United Arab Emirates edged down as the rebound in the shares of Dubai builder Arabtec appeared to be over.