CAIRO: Egypt’s bourse recorded an all-time high on Tuesday, hitting the 10,000-point threshold for the first time before closing the session at 9,998.24 points.
The Case30 Index rose 1.4 percent on a strong turnover of LE 1,524 million ($275.7 million), mainly lifted by blue chips.
“There is general optimism and enthusiasm in our market, and investors are buying, explained Walaa Hazem, co-head of research at HC Securities. “Different shares are causing that push.
Shares in Talaat Mostafa Group Holding (TMG) reversed their two-day negative trend and moved into the green, ranking among the session’s best performers. The share climbed 2.64 percent to close the day at LE 12.81 on a strong turnover of LE 152.42 million.
An initial public offering of 65 million shares in late November oversubscribed applications by 41.4 times the shares available, with total offers reaching LE 29.6 billion ($5.4 billion), while an earlier private placement of 330 million shares was covered 17 times, and shares were sold for LE 3.83 billion.
TMG – Egypt’s biggest real estate developer – recently announced it had bought more shares in four affiliate hotel companies for $350 million as part of an expansion plan in the sector.
“News of acquisitions and further investment plans spur investor demand on stocks, Hazem said.
Shares in big cap Orascom Construction Industries (OCI) also jumped 2.27 percent to end the day trading at LE 528.11 ($95.30). There was market speculation that the company may split its stock – dividing itself into separate cement and construction firms – or offer a special dividend.
“Such assumptions are lifting the stock, Hazem explained.
OCI seems to be on the verge of new expansion plans, as the firm recently revealed new projects in Nigeria, North Korea and South Africa. These plans are expected to raise annual production capacity to 44 million tons, placing OCI in the world s top 10 cement producers.
OCI recently reported a 40 percent rise in net income for the first nine months of 2007 to $491.8 million from $350.3 million a year earlier. Consolidated revenues grew 29 percent to $2.69 billion.
The company – Egypt s largest construction firm by market value – won on Tuesday a 1.35 billion euro ($1.99 billion) contract to build a power plant in Algeria as part of a consortium with France’s Alstom.
The telecom sector saw gains across the board. Orascom Telecom Holding (OTH) – the fourth largest Arab mobile operator by market value – saw a 1.41 percent increase to close at LE 86.81 per share, with heavy trading worth LE 229.67 million. The firm extended gains for the second consecutive day after it said on Monday its nine-month profit more than doubled as subscriber numbers jumped 47 percent to reach 64.7 million in September.
Traders expect the stock to reach LE 90, as the company now owns a lot of liquidity after the sale of its Iraqna mobile unit (for $1.2 billion) and Hutchinson (for $193 million).
Telecom Egypt also inched 1.16 percent upwards with a turnover of LE 69.27 million to close the session at LE 20.14 per share. MobiNil ended the day trading at LE 219.31 per share with a growth of 0.11 percent and a turnover of LE 30.50 million.
The financial services sector constituents were mostly upward movers. Shares in Commercial International Bank (CIB) – Egypt s largest listed lender by value – also helped boost the Index, gaining 3 percent to close at LE 83 with a huge turnover of LE 129.06 million.
Fitch gave the bank “BB+ rating with a positive outlook on Monday. Fitch said it had confidence the bank would be able to deal fairly well with any future downturn in the operating environment.
Shares in the bank are deemed cheap relative to its earnings expectations, causing heavy demand on the bourse. According to Reuters financial data, CIB is trading at 15.15 times forecast 2007 earnings compared to a sector average of 20.15 times. Rumors of the bank’s potential merger with Cairo-based Arab African International Bank also drove up the share.
“The news pushed [the bank’s] shares upward, Radwa El-Swaify, senior banking analyst at Beltone Financial, told the Daily News Egypt. “If the transaction goes through, it will be a positive consolidation step in the sector. The market is fragmented, and consolidation is [very much] needed.
Blue chip Egyptian Financial Group-Hermes (EFG-Hermes) advanced 1.41 percent and closed the day at LE 60.29 with trading worth LE 137.56 million. Reuters stated the group was trading at 19.17 times expected 2007 earnings, compared to a sector average of 19.60 times, again tempting investors to buy its shares.
