Egypt Stocks Rally Most in Mideast on Bets Float to Appease IMF
Egypt's stock market surged in early trade on Sunday, led by
financial companies' shares, on hopes that the economy will benefit from last
week's devaluation of the Egyptian pound.
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The Egyptian pound is trading in banks at around 16 to the
dollar, down from the 13-pound peg the Central Bank set as a guiding exchange
rate when it floated the currency last week.
The blue chip index was up 2.4 percent after five minutes of
trade while the broader EGX100 index climbed 2.0 percent. On Thursday, the blue
chip index had risen 3.4 percent in an initial response to the devaluation.
The floatation was followed just hours later with a hike in
the price of fuel, measures that met key demands set by the International
Monetary Fund in exchange for a $12 billion dollar loan to overhaul Egypt's
ailing economy.
Commercial International Bank, the biggest bank, jumped 5.2
percent while investment bank EFG Hermes climbed 3.0 percent. The buying was
mainly by local investors; many foreign fund managers said the devaluation was
unlikely to cause them to rush back into Egypt, given continued uncertainty
about the economy
The IMF's executive board has yet to ratify the loan.
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