Egypt Shares Rise Most in 2 Months as New Cabinet Spurs IMF Bets

On Tuesday, Egypt’s benchmark stock index surged the most in two months on investor bets a Cabinet change will boost the nation’s prospects of finalizing a loan agreement with the International Monetary Fund.

Commercial International Bank Egypt SAE (COMI.CA), the country’s biggest publicly traded lender, gained the most in almost five months. Telecom Egypt Co. (ETEL.CA), the monopoly fixed-line phone company, advanced 3.1 percent. The EGX 30 Index increased 1.8 percent, the most since March 7, to 5,372.63 at the close in Cairo. The markets regulator said on Tuesday it will allow investors to sell shares bought in the same session after a two-year halt.

Nine new Cabinet members, including the finance and planning ministers, were sworn in by President Mohamed Morsi today after he pledged changes last month. The North African nation has struggled for two years to obtain a $4.8 billion IMF loan amid violent protests and government instability in the fallout of the revolt that toppled Hosni Mubarak in 2011.

“Market sentiment has improved after the cabinet reshuffle, especially with the replacement of the finance minister,” Mohamed Radwan, head of equities at Cairo-based Pharos Holding for Financial Investments, said by phone. “There are hopes this government will do a better job of securing an IMF deal.”

Lower Volatility

Morsi’s opposition accuses his Muslim Brotherhood government of failing to stabilize the nation or realize the goals of the revolt two years ago. Since then, Egypt has been mired in a polarizing battle between secularists and Islamists, while its economy has grown at the slowest pace in two decades.

Egypt’s bourse will restart same-session equity trading on May 23, the Egyptian Financial Supervisory Authority (EFSA) said on Tuesday. All members of the EGX 30 excluding Eastern Tobacco are eligible, the bourse said last month. The halting of same- session trading was among measures taken by the regulator to curb volatility following the uprising two years ago.

The EGX 30’s 10-day volatility, a measure of price swings, dropped to the lowest level since 2004 on April 30, according to data compiled by Bloomberg.

Commercial International climbed 4.2 percent to 32.44 Egyptian pounds. The lender will probably post a 20 percent increase in first-quarter profit when it releases results next week, according to the average of four analyst estimates compiled by Bloomberg. Telecom Egypt rose the most since Dec. 27 to 13.04 pounds.

Pound-denominated government debt gained, with the mid- yield on one-year treasury bills losing 10 basis points, or 0.1 of a percentage point, in the secondary market to 13.85 percent, according to data compiled by Bloomberg. That’s the lowest level in six weeks. The yield on the government’s benchmark $1 billion of 5.75 percent Eurobonds retreated two basis points to 7.17 percent at 3:18 p.m. in Cairo.


Leave a comment