CAIRO: Egypt’s main stock index rose by its most in more than a week on Tuesday, led by shares of El Sewedy Cables as investors bet share prices had fallen too low compared to earnings expectations.
The EGX 30 index rose 3.14 percent to 4,214.64 points, extending gains to a sixth consecutive session. Shares of El Sewedy, the largest Arab cable maker by market value, surged 10.08 percent to LE 48.25 ($8.57).
El Sewedy is the worst performer so far in 2009 on the EGX 30, down about 40 percent.
“At below the LE 40 price level, it was trading at multiples below pure cable peers in the region, while we believe it should trade at a premium to pure cable peers due to its diversification into non-cable activities and high growth prospects, said Wafaa Baddour, analyst at EFG-Hermes investment bank.
Baddour said retail investors were buying Sewedy shares.
Shares of EFG-Hermes, Egypt’s largest investment bank by market value, rose 4.81 percent to LE 15.05.
Foreign investors were buying Egyptian shares after a US plan to rid banks of toxic assets boosted appetite for risk, said Karim Hosny, trader at Pharos Securities.
“The buying flow is from foreigners, Hosny said. “They are looking at the market in tough times, and so they are looking at companies with solid balance sheets that will survive the recession.
EFG-Hermes chief executive Yasser El Mallawany told Reuters earlier this year the bank had no need for more capital and had not invested in subprime products and other assets that sparked the credit crisis.
Shares of Ezz Steel, Egypt’s largest steel producer by sales, tumbled 15.75 percent to LE 7.06 after the deadline passed for its LE 1.30 dividend.
The Hermes index gained 2.79 percent to 394.90 points, while the broader EGX 70 index added 1.27 percent to 504.78 points.
