Last Update 10:50
Monday, 18 November 2019

Egypt index rallies Wednesday as bargain hunters lift CIB

Investors jump in as CIB's share price hits its lowest level since mid-2014, buoying the market overall

Ahram Online , Wednesday 25 Nov 2015
Egypt Stock Exchange
Traders at Egypt Stock Exchange in Cairo (Photo: Reuters)
Share/Bookmark
Views: 1076
Share/Bookmark
Views: 1076

Egypt's main index rallied by 1.1 percent Wednesday to reach 6,391 points, buoyed by market bellwether Commercial International Bank (CIB).

The CIB, which accounts for over a fifth of the index market cap, rebounded 2.68 percent to close at LE42.46, after its share price fell by 22 percent in the last three weeks in the midst of an aggressive foreign sell-off. 

"The stock is currently trading at 1.8 times its expected book value, the lowest level since about July 2014, and some might think that this is not justified given the high return on equity achieved by CIB, which is north of 30 percent. So this could have triggered some to step in at current levels," Monsef Morsy, financial sector head at the investment arm of the bank CI Capital, told Ahram Online. 

CIB announced Tuesday that it would issue one bonus share for each four held, as part of a capital increase from LE2.29 billion ($293 million) to LE11.47 billion.

The bank will increase its capital from its reserves and in return will issue 229.4 million shares in the bonus issue at a nominal value of LE10 per share. 

A lack of clarity regarding Egypt's foreign exchange regime and interest rates, as well as regional security concerns stemming from an escalation of the war in Syria, are behind the foreign sell-off, market analysts have said.

Orascom Telecom Media and Technology Holding (OTMT) stabilised at LE0.58 after a week of losses following the deconsolidation of 75 percent-owned North Korean subsidiary Koryolink.

Real estate giant TMG Holding rose 1.17 percent to LE6.07, while Palm Hills Development Company climbed 2.84 percent to LE2.17.

GB Auto saw its share price jump 3.77 percent to LE3.03.

Short link:

 

Email
 
Name
 
Comment's
Title
 
Comment
Ahram Online welcomes readers' comments on all issues covered by the site, along with any criticisms and/or corrections. Readers are asked to limit their feedback to a maximum of 1000 characters (roughly 200 words). All comments/criticisms will, however, be subject to the following code
  • We will not publish comments which contain rude or abusive language, libelous statements, slander and personal attacks against any person/s.
  • We will not publish comments which contain racist remarks or any kind of racial or religious incitement against any group of people, in Egypt or outside it.
  • We welcome criticism of our reports and articles but we will not publish personal attacks, slander or fabrications directed against our reporters and contributing writers.
  • We reserve the right to correct, when at all possible, obvious errors in spelling and grammar. However, due to time and staffing constraints such corrections will not be made across the board or on a regular basis.
Latest

© 2010 Ahram Online.