CAIRO: Egypt’s main share index, EGX30, ended a four-day losing streak to close 1.9 percent higher on optimism the detention of former President Hosni Mubarak in a graft probe will bolster support for the country’s military rulers.
The latest declines came as investors digested Egypt’s economic problems after a spate of exuberance last month when the country’s stock market reopened after a hiatus of more than seven weeks.
In the wake of the popular uprising that ousted Mubarak, foreign reserves last month dipped by $3 billion, annual inflation reached an 11-month high and investigators froze the assets of a growing number of business figures.
The army won broad popular support for showing Mubarak the exit, moving to restore normality in the country after the 18-day uprising and promising free and fair elections this year.
"We’ve been slightly hammered for the past few days and the market needed to correct," said Youssef Kamal of Naeem brokerage. "In addition, I think the [Mubarak] news today should boost confidence because it reflects that the army’s new plan is working properly."
All but one stock on the benchmark index gained, with telecom-related stocks boosting the EGX30 to 5,301.5 points.
Orascom Telecom (OT) gained 4.9 percent on optimism that shareholders will approve a plan to split the company in two in a way that increases value share values.
Shareholders are meeting on Thursday to discuss the split of the company and a capital increase to LE 14 billion as part of Russian mobile operator Vimpelcom’s takeover of the company.
"Investors are buying the stock in hopes that OT’s shareholder meeting held tomorrow on the company’s split will increase the share price," said Ahmed Hassan, a trader in Osool Brokerage.
Egypt’s landline monopoly Telecom Egypt, which climbed 5.8 percent, is among the bourse’s 10 most active stocks, with shares worth over LE 8 million changing hands.
Defensive food-related stocks are among top gainers, with Ajwa Food surging by 9.9 percent and dairy and juice maker Juhayna by 8.6 percent. –Reuters