Jan. 26 (Bloomberg) -- Egypt’s benchmark stock index rose to become the world’s second-best performer as foreign investors returned after peaceful protests on the first anniversary of the uprising that ousted Hosni Mubarak. Government bonds gained.
Orascom Telecom Holding SAE increased 9.8 percent. EFG- Hermes Holding SAE, the biggest publicly traded Arab investment bank, rose to the highest level in more than two months. The benchmark EGX 30 Index jumped 7.2 percent, the most since February 2008 and the second-best among 91 global indexes tracked by Bloomberg after Cyprus, to 4,432.99 at the 2:30 p.m. close in Cairo. The cost to insure Egypt’s debt against default dropped.
Hundreds of thousands of Egyptians took to the streets in the country’s main cities, including Cairo, Alexandria and Suez. Some celebrated to mark the anniversary, while others protested against the ruling generals who took power from Mubarak. Foreign investors were net buyers of 40.2 million Egyptian pounds ($6.7 million) in stocks, according to Egyptian Exchange data.
“Yesterday’s protests were peaceful so they calmed fears by some investors leading up to the anniversary,” said Tamer Nigm, head of sales and trading at Cairo-based Watheeqa Securities Brokerage. “We expect the rally to continue but for investors to be more selective, focusing more on blue chips with good fundamentals.”
Egypt’s 5.75 percent dollar bonds due April 2020 rallied for a fourth day. The yield dropped 36 basis points to 6.6 percent, the lowest level since Nov. 18, according to prices compiled by Bloomberg. The rate has tumbled 114 basis points this week. The pound was little changed at 6.0380 a dollar.
The country’s five-year credit default swaps retreated 12 basis points to 558, the lowest level in seven weeks, according to data provider CMA which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately-negotiated market.
The stock index plunged 49 percent last year, ranking it the third-worst performer among world equity indexes tracked by Bloomberg. The bourse suspended trading today for 30 minutes after the EGX 100 Index rose 5 percent, breaching a limit for losses and gains by the measure put in place by the Financial Supervisory Authority in February.
About 155 million shares exchanged hands, compared with a daily average of 61 million shares in the last six months.
Orascom Telecom, the Cairo-based mobile phone company, climbed for a fourth day to 3.36 pounds after a near two-month trading suspension to allow it to split its assets and as it draws closer to selling its Algerian unit.
EFG-Hermes increased 7.7 percent to 11.49 pounds. Chief Executive Officer Yasser El Mallawany said yesterday the firm has a very aggressive cost-cutting plan and that he sees a “good pipeline” of merger and acquisition transactions in the Middle East this year.
--Editors: Shanthy Nambiar, Daliah Merzaban
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