The Wires: News that Egypt is to get financial aid from Saudi Arabia and the US has helped shares in the embattled country.
US and Saudi $6 billion aid pledge boosts Egypt's shares
CAIRO // Egypt's shares rallied to a one-month high as the US and Saudi Arabia pledged a total of $6 billion (Dh22bn) in support for the North African country recovering from the aftermath of a popular uprising that ousted its president.
Orascom Telecom Holding SAE surged as much as 8.9 per cent after Deutsche Bank AG raised the country's biggest mobile-phone operator to "buy." Ezz Steel, Egypt's largest producer of the metal, soared 7 per cent. The EGX 30 Index climbed 1.7 per cent to 5,335.96, the highest intraday level since April 14, at 11:15am in Cairo. The index has tumbled 25 per cent this year. The EGX 100 Index increased 2.1 per cent.
Saudi Arabia's assistance will be granted in "soft loans, deposits and grants," the state-run Saudi Press Agency said yesterday, citing a statement by Egyptian Field Marshal Mohamed Hussein Tantawi, who heads the ruling military council. US President Barack Obama last week pledged aid for Egypt that included $1bn in loan guarantees through the Overseas Private Investment Corporation and a cancellation of $1bn in debt, about a third of what the nation owes the US.
"The money coming in from the US and Saudi Arabia is definitely affecting the market positively," said Ashraf Akhnoukh, senior equity sales trader at Cairo-based Commercial International Brokerage. "It gives the government space to breathe, regardless of where the money will be spent."
The economy has suffered from inflation, a lack of investment, a budget deficit and decline in tourism since the uprising, Mohamed ElBaradei, a possible candidate for the Egyptian presidency, said in remarks to CNN's "Fareed Zakaria GPS."
Economic growth may slow to 1 per cent this year, the lowest rate in almost two decades, the International Monetary Fund has said. Former President Hosni Mubarak ceded interim authority to the Supreme Council of the Armed Forces on February 11.
Orascom Telecom rallied the most since March 29 to 4.75 Egyptian pounds. The company was assigned a 12-month price estimate of $4.20 at Deutsche Bank. Ezz soared to as high as 11.01 pounds, the highest since April 6.
Saudi Arabia's Tadawul All Share Index rose 0.5 per cent and the Bloomberg GCC 200 Index of Gulf stocks advanced 0.2 per cent. Oman's MSM30 Index gained 0.3 per cent. Bahrain's BB All Share Index lost 0.5 per cent and Dubai's DFM General Index retreated 0.8 per cent. Kuwait's measure and Abu Dhabi's ADX General Index dropped 0.1 per cent.
In Israel, the TA-25 Index fell 0.9 per cent. The benchmark Mimshal Shiklit government bond due January 2020 gained, pushing the yield on the 5 per cent bond down one basis point to 5.15 per cent.
Zahra Hankir and Ahmed Namatalla - Bloomberg News