Egypt's market hits new six-year record after pound devaluation

Ahram Online , Tuesday 27 Jan 2015

Stock market reaches highest level in over six years, after investors respond to recent pound devaluation

Staff at the Egyptian stock exchange in Cairo (Photo: AP)

Egypt's stock exchange reached its highest level in over six years on Tuesday, coming close to the 10,000 points benchmark, as investors respond to the pound devaluation, an analyst has told Ahram Online.

Main index EGX30 gained 1.14 percent to 9,946 points, with daily stock turnover hitting LE873.4 million.

"The market is booming on the central bank's move to devalue the pound to close the gap between the official and unofficial rate, a necessary step to court investors in March," Eissa Fathy, vice head of the securities division at Cairo Chamber of Commerce, told Ahram Online.

Egypt's central bank started devaluing the pound last week through currency auctions to reach LE7.43 per dollar.

The rates at which banks are allowed to trade dollars are determined by the results of central bank sales, giving the bank effective control over official exchange rates.

The move precedes an expected report by the International Monetary Fund (IMF) on Egypt's economy that is seen as influential to the outcomes of Egypt's Economic Development Conference to be held in March, Fathy said.

Following a mission to Egypt to prepare for the report in November, the IMF urged the government to employ a more flexible exchange rate to boost investment.

Non-Arab foreign investors were net sellers in the session to the tune of LE18.1 million, while Arab investors were net buyers to the tune of LE9.8 million.

Market bellwether Commercial International Bank (CIB) increased 1.66 percent to LE55.6 per share.

Egypt's leading investment bank, Egyptian Financial Group-Hermes, was up 2.59 percent to LE18.07 per share.

The real estate sector led the main index with Madinet Nasr Housing, Heliopolis Housing and SODIC rising 5.02 percent to LE35.25 per share, 3.56 percent to LE70.01 per share, and 1.81 percent to LE15.6 per share respectively.

Broader index EGX70 inched up 1.19 percent.

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