Egypt Stocks Jump Most Since March on Currency Devaluation Hints
(Bloomberg) -- Egyptian stocks advanced the most since March after the central bank hinted it may devalue the local currency.
The EGX 30 Index rose 2.9 percent to 7,182.8 at the close in Cairo. About 609 million Egyptian pounds ($69 million) of shares traded, the most since May.
The rally came a day after Central Bank Governor Tarek Amer said that the policy of defending the pound in the past five years was a “grave mistake,” and that currency depreciation would help boost Egyptian exports. Amer has maintained the pound's level against the dollar since a devaluation in March to avoid stoking inflation in a country where almost half of the population lives near or below the poverty line.
Investors are “taking the central bank governor's comments to mean we're on the verge of another round of devaluation, hence the rush into real estate and financial stocks, which stand to benefit the most,” said Mohamed Ebeid, the head of brokerage at Cairo-based EFG-Hermes.
Commercial International Bank Egypt, the nation's biggest publicly traded company, rose 2 percent and was the biggest contributor to the EGX 30's increase. The measure's real estate index jumped 5.1 percent, led by Talaat Moustafa Group Holding and Six of October Development & Investment Co.
Egypt's financial markets will close from Tuesday to Thursday to mark the end of the Muslim holy month of Ramadan.
To contact the reporter on this story: Ahmed A. Namatalla in Cairo at anamatalla@bloomberg.net. To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Justin Carrigan
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