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Egypt's stocks bolstered by IMF loan prospects
Foreign investors fire local Bourse, encouraged by government's ostensible ability to secure $4.8 billion IMF loan
Ahram Online, Monday 29 Oct 2012
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Egypt stocks
Egyptian market sees gains despite Eid's holiday (Photo: AP)

Egypt’s stocks rose significantly on Monday, in the first session since the start of the Eid holiday, buoyed by active foreign investors’ trading on positive signs that President Morsi' government is making headway on clinching the International Monetary Fund’s loan by the end of this year.

The benchmark EGX30 climbed 1.7 per cent, recording 5.893 points in a session which saw a modest daily turnover worth LE579.4 million, as most domestic investors are wrapping up their Eid holidays on the last official vacation day.

Foreign investors were net purchasers for the day to the tune of LE42.2 million.

Reuters reported on Monday that the mood of Egypt's financial markets would likely depend this week on the government's ability to secure the $4.8 billion IMF loan.

An IMF team is expected to arrive in Cairo for talks on Tuesday, after the Eid Al-Adha holidays, according to Egyptian and IMF officials.

The broader index EGX70 rose by 1 per cent.

Almost all heavyweight shares saw gains that were led by the Commercial International Bank and Orascom Construction Industries, which witnessed a rise in shares by 1.2 and 2.4 per cent respectively.

Orascom Telecom and Ezz Steel climbed by 1.3 and 1.5 per cent.

Property shares Talaat Mostafa Group, Palm Hills and Six of October Development and Investments rose by a whopping 3.7, 3.2 and 2.4 per cent, respectively.
 



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TH
29-10-2012 06:35pm
0-
3+
Someone help me understand - what am I missing?
I don't understand why the market sees our ability to borrow and spend another $4.8 billion as a good sign ? Wasn't the world financial meltdown of 2008 driven by consumers and governments borrowing and spending on overinflated assets. If Morsi spends this money on subsidies , inefficient government, and poorly thought out projects with minimal returns, will the country's economy improve ? Help me ? Shouldn't we hear how the $4.8 billion will be spent before the market gets excited ? What is the plan to improve education, attract foreign investment ( not borrowings) , improve competitiveness, and create jobs? Once I hear all that, then I will gladly invest in the Egyptian Stock market, not until then !
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