CAIRO: Egypt s benchmark index posted its sharpest single-day gain in nearly three months on Tuesday as investors bought shares of telecommunications and banking companies on expectations of strong earnings.
Shares of Telecom Egypt, the largest Arab fixed-line telephone operator by subscribers, surged 7.01 percent to LE 14.65 ($2.63), their best day since Nov. 25.
Shares of Mobinil, Egypt s largest mobile operator by subscribers, rose 4.14 percent to LE 135.08.
There are good expectations for financial results, said Iman Sadek, broker at Naeem Holding in Cairo. Telecom is a defensive sector. People are not going to stop talking.
Cairo-based investment bank Beltone Financial said it expects Telecom Egypt s fourth quarter net profit to rise 25 percent on increased revenue from tariffs and from the firm s submarine cable between Europe and Egypt.
Financial stocks also jumped, with EFG-Hermes rising 6.53 percent to LE 14.20 and Commercial International Bank gained 4.91 percent to LE 33.31.
May Hagar, analyst at Naeem Brokerage, said the fair value of CIB shares is LE 53. Shares of the bank are trading at 6.35 times estimated 2009 earnings, compared to a sector average of 12.78, according to Reuters data.
We see the stock having very good prospects for the coming period, she said. People are moving the stock up on expectations of a good result for the end of last year.
Orascom Construction Industries extended gains, jumping 5.24 percent to LE 107.60. Shares had dropped 27 percent this year to Monday s close.
People are buying because Orascom s drop was severe and LE 100 was considered a major support level, said Karim Hosny, trader at Pharos Securities. We expected a rebound from that support level.
The Hermes index rose 4.36 percent to 372.75 points and the broader CIBC index gained 4.28 percent to 275.3 points. -Reuters
