Egypt index bounces higher after Wall Street bailout

Daily News Egypt
3 Min Read

CAIRO: Egypt s main indexes ended sharply higher on Sunday, buoyed by sharp increases in heavyweight stocks after the US government announced a $700 billion bailout plan for Wall Street.

The benchmark CASE 30 index gained 6.15 percent to 7,500.95 points, registering its biggest one-day gain since March 2006, after hitting an intra-day high of 7,658.72 points. The Hermes index gained 5 percent and the broader CIBC index added 4.35 percent.

This is a reflection of what happened on Friday after the good news coming out of the US, said Mohamed Ebeid of EFG-Hermes Securities Brokerage.

On Saturday, the Bush administration asked Congress for $700 billion to bail out firms burdened with bad mortgage debt.

Traders said that trade had been briefly suspended in heavyweights EFG-Hermes, Orascom Construction Industries (OCI), Orascom Telecom and Commercial International Bank after they gained in excess of 10 percent.

The board of OCI approved the buyback of up to 5 percent of outstanding stock, the company said in a statement. It also said it would buy 2.15 million shares in the next month. Shares in OCI, Egypt s largest builder by market value, ended 4.82 percent higher at LE 326.11. Orascom Telecom, which is also seeking to buy back up to 5 percent of stocks, ended 7.69 percent higher at LE 42.83.

OT and OCI were already trading higher in London on Friday, said Hashem Ghoneim, the head of El Nour Securities. We were delayed; we were closed on Friday and Saturday.

On Friday, the Egyptian central bank said it had raised key interest rates by a half percentage point, its sixth straight increase, in a bid to contain inflation expectations.

Most banking stocks and financial stocks rose, with National Societe Generale Bank ended 13.28 percent stronger at LE 28.49.

Commercial International Bank pared its early morning gains to end up 3.49 percent to LE 40.90, and investment bank EFG-Hermes was up 5.41 percent at LE 38.80.

Piraeus Bank was a notable exception, declining 4.57 percent to LE 21.50.

Foreign investors were net buyers of Egyptian stocks by LE 18 million ($3.3 million), while local investors and non-Egyptian Arabs were both net sellers, stock exchange data showed.

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