Egypt’s stock market (Photo: Reuters)
Egypt’s main EGX30 index rose 1.54 percent to reach 5615 points as Egyptian investor optimism drove stocks further up on Monday.
The market liquidity comes from the acquisition of over 97 percent of Orascom Construction Industry shares by Dutch parent company OCI NV, which was concluded last week in a deal that de-listed OCI from the main index says the head of institutional sales at the Cairo-based Arabia Online Securities, Ashraf Abdel Aziz, to Ahram Online.
"This is reflected in the increased buying by Egyptian institutions, which possessed OCI shares," says Abdel Aziz.
Egyptian institutional investors grabbed a net LE91 million in shares, while Egyptian investors on the whole net-bought LE63.4 million worth of stocks in a session which saw total turnover rise to LE504.8 million.
"The optimism is a result of the Central Bank of Egypt’s cutting of the interest rates" adds Abdel Aziz.
In a move that reflected optimism regarding the strength of the Egyptian pound and a restart of the economy, Egypt’s central bank cut interest rates by 50 basis points Thursday.
Egypt’s new Cabinet, headed by liberal economist Prime Minister Hazem El-Beblawi, has repeatedly reiterated that its priority is to stimulate economic growth, which had slowed to 2.2 percent at the end of the 2012/2013 fiscal year.
"The move sends a strongly positive message to investors and the business community because it means the government - namely the finance ministry and central bank - are united in their vision, which historically has been a challenge…and that’s very reassuring," Cairo University Faculty of Economics and Political Science Dean Hala El-Said interprets to Ahram Online.
The majority of EGX 30 shares were in the green, namely blue chip Commercial International Bank, up 3.05 percent and Egyptian Financial Group-Hermes, which rose 1.67 percent.
Real estate heavyweights Six of October for Development and Investment, Palm Hills Development Company and TMG Holding gained 5.41 percent, 2.45 percent and 0.61 percent, respectively.
The broader EGX 70 index rose 0.53 percent.