Blue-chips including Orascom Construction lead Egypt’s main index to its highest close since May 6, spurred on by optimism that a government stimulus plan will boost economic growth in 2011, traders say.
"The index is at critical levels and a lot of people are buying after it broke the 7,000 point level," says Karim Hosny of Pharos Securities, adding that the next resistance level is at 7,400 points.
The index gains 0.9 percent to 7,027 points.
Financial and construction stocks lead the index higher as an off-budget stimulus plan to inject 10-20 billion Egyptian pounds into the economy renews investor appetite for equities, traders say.
Finance Minister Youssef Boutros-Ghali told Reuters that the stimulus, based on letting 5.7 million state employees borrow against salaries to make retail and other purchases, should boost growth by 0.50-0.75 of a percentage point.
Index heavyweight Orascom Construction leads gainers, climbing 1.8 percent and taking the biggest share of trading volume. Big-cap EFG-Hermes, Egypt’s biggest listed investment bank, advances 1.3 percent.
Orascom Telecom (OT) rises 0.2 percent after CNBC Arabia quotes its chairman as saying the firm will seek international arbitration soon in a dispute with Algeria’s government over OT’s unit Djezzy.
"Investors see this news as positive for OT, but it’s too early to say what will happen," Hosny adds. "This is seen as OT’s last resort."
Egypt’s biggest listed lender Commercial International Bank rises 0.6 percent and financial services firm Pioneers Holding rises 1 percent. Ezz Steel adds 4.1 percent, its biggest single-day gain since May 10.
