Market Report: EGX30 up 4.4 pct on Sawiris deal

Ahram Online, Monday 13 Feb 2012

Sawiris deal with France Telecom sends Egypt's main stock index above 5,000 for first time in ten months

Egypt's stocks reaches the highest rise within 6 months (Photo: Reuters)

Egypt's EGX30 stock index gained 4.2 per cent on Monday for its biggest daily gain in six months on the preliminary deal between Naguib Sawiris and France Telecom for Mobinil shares.

The index closed on 5.099.36 points.

Naguib Sawiris is Egypt's wealthest businessman and founder of the liberal Free Egyptians political party.

“It’s the first time a foreign investor has been seen amid listed companies,” said Mostafa Badra of Capital Market.

On Monday, France Telecom said it had reached a preliminary accord to buy out most of Egyptian tycoon Naguib Sawiris' stake in their jointly owned telecom operator Mobinil, in a deal that will see the French group pay around 1.5 billion euros, according to Reuter’s calculations.

France Telecom was already the biggest shareholder in Mobinil, and Egypt is a key part of its effort to expand in high-growth emerging markets in Africa and the Middle East. The new accord simply accelerates the expected exit of Sawiris, who had a put option to sell to France Telecom starting in September 2012.

Badra added that Egypt stocks volume were boosted when the index went through the 5,000 point barrier for the first time in ten months.

Mobinil and Orascom Telecom Media and Technology Holding [OTMTH], which are involved in the upcoming Sawiris deal with France Telecom, each gained 10 per cent on the day.

Mobinil and Orascom Telecom Media and Technology (OTMT) shares were suspended at the start of trade on Monday pending further disclosures on a planned France Telecom purchase of Mobinil shares, the Egypt stock exchange said.

Broader indices also recorded gains on Tuesday, with the EGX70 and EGX100 rising by 2.2 and 3.1 per cent respectively, reflecting across-the-board gains.

Egyptian investors constituted the day's main buyers, scooping up a total of LE10.5 million in shares, while foreign investors sold some LE17.4 million more than they bought.

“Foreigners were concerned with profit-taking,” Badra told Ahram Online.

Market heavyweights Commercial International Bank (CIB) and Orascom Construction Industries (OCI), gained 4.4 and 2.5 per cent respectively, while Orascom Telecom (OT) rose by 2.3 per cent, with its highest daily turnover of LE62.5 million.

Property development bellwethers TMG and Palm Hills did similarly well, finishing up 7 and 6 per cent respectively.

The telecommunication sector was amid the market leaders, with Telecom Egypt gaining by 9 per cent.

Of the market's 192 listed stocks, 161 finished up on Wednesday, while 23 recorded losses in a day that saw total daily turnover of LE708.3 million.

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