Egypt stocks rise on economic stimulus package

Ahram Online, Tuesday 22 Oct 2013

Monday finance ministry announcement of plans to increase proposed stimulus package by one third injects life in Egypt market as EGX30 rises 1.8 percent

Egypt stocks

Egypt stocks continued to rise for a third consecutive session this week, responding to flat US markets and the new governmental stimulus package increase.

The main index EGX30 rose 1.8 percent, recording 6.201 points, as optimistic investors responded to the finance ministry's announcement late on Monday that it would spend LE29.6 billion ($4.30 billion) on a stimulus package to get its moribund economy going, a third more than previously planned.

The original plan announced in August had provided for around LE22.3 billion in stimulus funds.

"The government stimulus package is like pumping blood into a dead body's veins to bring it back to life," said Mostafa Badra, a Cairo-based market expert.

Badra told Ahram Online that the US debt drama has prompted American investors to target emerging markets such as Egypt.

Last week, the dollar languished near an eight-month low against the euro as investors counted the costs of a two-week US government shutdown, with markets now seeking clues as to when the Federal Reserve will begin reducing its stimulus program.

The broader index EGX70 inched up 0.7 percent in a session that saw a significant daily turnover of listed securities worth LE779 million.

Egyptians were the only net-buyers with some LE28 million.

The market's bellwether Commercial International Bank rose 1.3 percent, alongside the real estate developer Palm Hills which increased by 4.4 percent.

"It seems investors were drawn in after Palm Hills's announcement to increase its capital by LE600 million," Badra suggested.

The communication giant Global Telecom gained 1.7 percent.

Properties shares Talaat Mustafa Group and Six of October Development and Investment went up 3.1 and 1.1 percent, respectively.

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