Egypt Shares Advance to Two-Month High on G-8 North Africa Aid
May 29, 2011, 10:59 AM EDTBy Zahra Hankir and Ahmed Namatalla
May 29 (Bloomberg) -- Egypt’s shares rose to the highest level in almost two months after the Group of Eight leaders pledged to provide at least $40 billion in aid to North Africa.
Orascom Construction Industries, Egypt’s biggest publicly traded construction company, advanced 2.7 percent. EFG-Hermes Holding SAE, the largest publicly listed investment bank, rose to the highest since March 23. The EGX 30 Index rallied 2.5 percent to 5,548.06 at the 2:30 p.m. close in Cairo, the highest level since April 3. The measure has tumbled 22 percent so far this year as a popular uprising that ousted Hosni Mubarak in February forced the bourse to close for almost two months.
Local stocks are benefitting from “international aid commitments announced for Egypt,” and after protests on May 27 passed without violence, said Tamer Nigm, head of sales and trading at Cairo-based Watheeqa Securities Brokerage.
Institutions such as the World Bank and the African Development Bank could provide more than $20 billion for Egypt and Tunisia through 2013, including 3.5 billion euros ($5 billion) from the European Investment Bank, to support “suitable reform efforts,” G-8 leaders said in a May 27 statement after a two-day summit in France. Thousands of Egyptians rallied that same day in Cairo demanding faster trials for Mubarak and other officials in his ousted regime, as well as a bigger role in policy making during the transition period.
Proposed Law
French President Nicolas Sarkozy, in a press conference last week, said G-8 countries will provide another $10 billion in direct aid to Tunisia and Egypt, and that oil exporting countries in the Gulf such as Kuwait, Qatar and Saudi Arabia will kick in another $10 billion. Those figures weren’t included in the communique.
Orascom Construction rose to 268.11 Egyptian pounds, the highest since Jan. 24. EFG-Hermes surged 6 percent to 22.7 pounds. The EGX 100 Index jumped 2 percent.
Egypt is also studying legislation to legalize land sales that violated the law under previous governments, Al Masry Al Youm reported on May 26, citing Omar El Shawadfy, head of the National Center for State Land Utilization. The law would hold the government accountable, the Cairo-based newspaper said.
“Investors are seeing the government is making real progress to settle disputes with business people, so that’s driving the real estate sector,” Nigm said.
Talaat Moustafa Group Holding, Egypt’s biggest publicly listed real-estate developer, is facing a lawsuit regarding the purchase of land from the government for its Madinaty project because it wasn’t done through an auction. A court in Cairo delayed its ruling on the case until June 21. The shares rose 7.5 percent to 4.76 pounds, the highest since March 28.
Abu Dhabi Rises
In the United Arab Emirates, the ADX General Index climbed 0.4 percent, snapping a six-day drop, and Dubai’s DFM General Index gained 0.7 percent. Qatar’s QE Index declined 0.3 percent and Oman’s MSM 30 Index lost 0.5 percent. Kuwait’s measure fell 0.3 percent and Bahrain’s BB All Share Index retreated 0.6 percent to the lowest level on record. Saudi Arabia’s Tadawul All Share Index gained less than 0.1 percent.
Israel’s TA-25 Index rose 1 percent and 10-year government bonds advanced. The yield on the Mimshal Shiklit note due January 2020 dropped one basis point, or 0.01 percentage point, to 5.06 percent.
--Editors: Shanthy Nambiar, Susan Lerner
To contact the reporters on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net; Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net
