Egyptian Shares Jump the Most in Over Seven Weeks
- Published on Sunday, 08 January 2012 19:13
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After a 4.5 per cent drop in the past week, Egyptian shares are now headed towards their largest gain since the month of August. Global markets as a whole have rallied in this week given the optimism surrounding the situation in Europe and the likelihood that the debt crisis in that region will be brought under control. The Standard & Poor’s 500 rallied 2.1 per cent in the week while Europe Stoxx 600 climbed 2.6 per cent after European Central Bank President Jean Claude Trichet declared a new plan to fight the debt crisis by purchasing bonds more bonds.
The nation’s benchmark index the EGX 30 climbed 1.9 per cent in the past week which is the biggest in almost two months; the index touched 4028.71 at closing time in Cairo. This rise was led by the country’s biggest lender, the Commercial International Bank which added 2.5 per cent having gained the most since 22nd August to reach 22.94 Egyptian pounds. Both the Commercial International bank and Egyptian Financial Group-Hermes Holding were elevated today at the AlembicHC. Alembic raised the bank’s status from ‘underweight’ to overweight’.
The current military regime in Egypt is set to acquit former premier Hosni Mubarak, which might provide incentive for further protests. There are going to be parliamentary elections in Egypt come November; this after the three decade long rule of Mubarak was ended recently. Mubarak is currently being tried on several charges, including killing of those who protested in the uprising against him.
The MSCI Emerging markets index is trading at 1.5 times the value; as compared to this the Egyptian index is only 1.1 times its book value. Amid all the troubles that the country is going through, Credit Suisse reported that there may be exciting investment opportunities in the state. It reiterated its stance by highlighting the case of Orascom Construction Company which rose by 3.7 per cent today, after having dropped more than 28 per cent in this year.
In other countries of the Middle East also the equity markets came out shining through the day. The benchmark index of Saudi Arabia climbed 0.3 per cent. Kuwait’s national index appreciated by 0.5 per cent, while the one in Abu Dhabi was up by 0.2 per cent and that of Qatar jumped 0.3 per cent. Bahrain’s index dropped 0.1 per cent while the Israeli index lost 1.4 per cent.