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Monday, 21 June 2021

Egypt stocks continue rally; global shares, oil rise ahead of Fed decision

EGX30 rises for fourth consecutive day

Ahram Online , Wednesday 16 Sep 2015
Egyptian broker gestures during a session at the Egyptian stock market in Cairo, Egypt (Photo: AP)

Egyptian stocks continued their rally on Wednesday as global shares and oil prices rose ahead of Thursday's US Federal Reserve decision about whether to raise interest rates.

The benchmark EGX30 index rose for the fourth consecutive session by 1.27 percent to close at 7,266 points, as heavyweights Commercial International Bank (CIB) and Telecom Egypt (TE) saw gains.

World shares, including Chinese stocks, rose on Wednesday, and short-term US bond yields hit four-and-a-half-year highs, Reuters reported, as investors braced for what could be the first US interest rate hike in almost ten years.

Meanwhile, oil prices rose after an unexpected drawdown in US stockpiles and an increase in US gasoline prices, Reuters reported.

Egyptian market bellwether CIB rose 1.12 percent to trade at LE51.52 a share while landline telecoms operator TE soared 5.16 percent to LE7.13 a share.

"Positive sentiment stems from a strong comeback in global equities, as global investors bet that the rate hikes in the US will be postponed," said Wafik Dawood, portfolio manager at Compass Capital.

"The market is in a dull phase where it's mainly mirroring global markets" Dawood told Ahram Online, though he added that a recent reshuffle of Egypt's cabinet may also be contributing to this week's rally.

Egyptian president Abdel-Fattah El-Sisi accepted the resignation of Prime Minister Ibrahim Mahlab on Saturday, days after a member of his cabinet was arrested on corruption charges, prompting unconfirmed media reports that other ministers might be under investigation for similar charges.

"There has been a sense for some time now that the government [of Prime Minister Ibrahim Mahlab] was not capable of delivering on the promises and the MOUs signed at the March conference and that nothing was materialising," he said, though he added that the reshuffle had a limited impact at best.

Arab investors were the main net-buyers for the session, to the tune of LE23.7 million, while Egyptians were net-sellers for LE26.7 million.

In the real estate sector, second largest listed EGX30 stock TMG Holding saw its share price rise 0.86 percent to LE7.06.

Medinet Nasr Housing went up 3.9 percent to LE20.53 a share, Palm Hills Development Company rose 1.53 percent to LE1.99 a share, and Sixth of October Development and Investment (SODIC) gained 1 percent to trade at LE9.10.

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