CAIRO: Egyptian shares rose 1.66 percent on Monday, with Talaat Moustafa Group (TMG) jumping more than 7 percent with investors betting the share price is low relative to future earnings.
Shares in the company, down 50 percent this year to Sunday s close, last traded at LE 7.16 ($1.32), ending the day in the green for the fourth straight session, a sign that investors have put fears about the company s future to rest.
TMG, Egypt s biggest real estate developer by market value, appointed Tarek Talaat Moustafa as Chairman last week, replacing his younger brother Hisham who was charged in a murder case.
The stock was undervalued, said Teymour El-Derini, trader at Beltone Financial. There are foreign funds and retailers buying.
Karim Hosny of Pharos Securities said: People now believe that whatever happens to the CEO (chief executive officer) there will be another one. Things cannot get worse.
Also helping the market up was Orascom Construction Industries (OCI), which rose 2.11 percent to last trade at LE 368.02 a share.
The group said on Monday it will pay an interim cash dividend this month of the equivalent of $1 per share or $2 for every GDR (global depositary receipts) share.
Regional mobile phone operator and market heavyweight Orascom Telecom dropped 1.16 percent to LE 46.77 a share.
Hosny said the firm was still suffering from lower-than-expected second-quarter results and a report by investment bank Goldman Sachs that downgraded it to neutral from buy , cutting its price target to LE 65 from LE 100.
Hosny also said news that the Egyptian government had postponed an auction to offer the second fixed-line telephone license for a year did not reflect well on the telecoms sector.
This is negative for the market in general. If there were appetite for the sector they could have sold it. This shows that no one is interested, he added.
Telecom Egypt, which will lose its status as the country s fixed-line monopoly when the license is sold, rose 1.27 percent to LE 15.18 a share.
Overall, the benchmark CASE 30 index rose to 8,480.53 points. The Hermes index gained 1.45 percent to 733.79 points, while the CIBC index was 2.82 percent up at 416.16 points.