Bloomberg News

Egypt’s Stocks Rise to 6-Month High on Mobinil

February 13, 2012

(Corrects name of brokerage in third paragraph in the story published yesterday.)

Feb. 12 (Bloomberg) -- Egypt’s shares rose to the highest in more than six months after a nationwide strike failed to gather support and France Telecom SA was said to be in talks to boost its stake in a local mobile-phone company.

EFG-Hermes Holding SAE, the biggest publicly traded Arab investment bank, jumped 8.2 percent. Palm Hills Developments SAE, a luxury real-estate developer, soared to the highest level since September. The benchmark EGX 30 Index advanced 2.9 percent to 4,892.93, the highest since Aug. 4, at the 2:30 p.m. close in Cairo. In the United Arab Emirates, Dubai’s DFM General Index rose for a third day, advancing 0.1 percent.

A call for a general strike by pro-democracy groups, including the April 6 Movement, demanding an immediate end to military rule didn’t garner support after Islamist parties which have a majority in parliament said they won’t participate. The strike’s failure and Orascom Telecom Media & Technology Holding SAE’s announcement that it was in advanced talks with France Telecom about the fate of their Egyptian Co. for Mobile Services, or Mobinil, venture helped boost the market, said Hassan Kenawi, equities trader at Cairo-based HC Brokerage.

“People are growing more confident in the market after lack of response from the public to the strike called for by some activists,” said Kenawi. “The possible acquisition of Mobinil by France Telecom also supports the positive sentiment especially for local institutions who see cash coming back into the market.”

Trading Suspended

France Telecom is in talks to purchase part of Egyptian billionaire Naguib Sawiris’s stake in their mobile-phone venture, a person familiar with the situation said. Sawiris may keep a small interest in Mobinil Telecom, the company that controls Mobinil, while selling his stake in the operator itself to France Telecom, said the person, who declined to be identified because the talks are private.

Orascom is the second-largest shareholder in Mobinil after the Paris-based company. The Egyptian Exchange suspended trading in Mobinil and Orascom Telecom Media.

EFG-Hermes shares rose to 12.40 Egyptian pounds, the highest level since Nov. 14. Palm Hills advanced 6.5 percent to 1.64 pounds.

In Dubai, Shuaa Capital PSC, the investment bank controlled by the emirate’s ruler, surged the most since June 2009 before a board meeting to discuss full-year financial results. The shares soared 15 percent to 67.8 fils. There are 100 fils to the dirham.

Abu Dhabi’s ADX General Index declined 0.4 percent, the most since Jan. 30, to 2,456.22 at the close after full-year earnings at Emirates Telecommunications Corp., the telephone operator known as Etisalat, missed estimates.

Etisalat Tumbles

Etisalat, the company with the heaviest weighting on the index, tumbled 2.1 percent to 9.25 dirhams after 2011 net income slid 23 percent to 5.84 billion dirhams ($1.6 billion). That missed the 7 billion-dirham average estimate of nine analysts surveyed by Bloomberg. The company booked an impairment of 1.02 billion dirhams because of canceled licenses in India.

The decline in the Abu Dhabi index is “mainly due to Etisalat’s weight on the index,” said Chahir Hosni, equity sales manager at EFG-Hermes Holding SAE in Dubai, attributing the drop to the telecom operator’s earnings. Five stocks in the benchmark index retreated, 15 rose and 47 were unchanged.

The MSCI Emerging Markets Index dropped 1.8 percent Feb. 10 as European leaders delayed a rescue package for Greece and China’s trade data signaled growth in the world’s second-largest economy is weakening. Oil in New York lost 1.2 percent to $98.67 a barrel. Gulf Arab oil exporters, including the U.A.E., supply about a fifth of the world’s oil.

Israel Gains

Oman’s MSM30 Index declined 0.4 percent and Qatar’s benchmark measure fell less than 0.1 percent. Saudi Arabia’s Tadawul All Share Index slipped less than 0.1 percent, while the Bloomberg GCC 200 Index dropped 0.2 percent. Kuwait’s gauge rose 0.7 percent and Bahrain’s measure advanced 0.2 percent.

In Israel, the TA-25 Index rose 0.4 percent as trading resumed following the end of a general strike that had shut the bourse since Feb. 7. The yield on the country’s 5.5 percent notes due January 2022 rose six basis points, or 0.06 percentage point, to 4.58 percent.

--With assistance from Mourad Haroutunian in Riyadh. Editors: Shanthy Nambiar, Daliah Merzaban

To contact the reporters on this story: Alaa Shahine in Dubai at asalha@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


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