CAIRO: Egypt’s benchmark share index gained 1 percent, helped by bank stocks such as Commercial International Bank (CIB) that are seen as havens against jitters in the market about any renewed political unrest, traders said.
Trading volume on the Egyptian Exchange has been modest for weeks as investors await more clarity on the scope of political probes and on the potential effect on real estate firms of the legal challenge to their purchases of state land under ousted president Hosni Mubarak.
Several prominent Egyptian businessmen are under investigation by prosecutors who suspect they benefited illegally from close ties with Mubarak.
"The market is trading in low volumes due to fears of growing political unrest in the Arab region," said Margo Moussa, an analyst at Arab Finance Brokerage.
"Investors see banking stocks as the most stable sector at such times," she said, adding that banks will benefit from financing big projects being promoted by the government.
CIB, Egypt’s biggest bank by assets, which gained 1.6 percent, is the most active stock with over LE 49 million ($8.24 million) worth of its shares traded.
EFG-Hermes rose 2.9 percent, adding to a gain on Thursday after the investment bank announced it was buying back shares. It was among the bourse’s top 10 traded stocks with more than LE 8.8 million worth of its shares changing hands.
Egyptian investment bank Pioneers holding was the index’s second largest gain at 8.8 percent.
The EGX closed up at 5,052.8 points with nearly two stocks gaining for each one that fell.
Several thousand people demonstrated in Cairo’s Tahrir Square on Sunday to demand more worker rights, though smaller than protests that toppled Mubarak it highlighted the pressure on the government to improve the lot of ordinary Egyptians.
Traders said investors also eyed telecom stocks.
"It is surprising that stocks like Mobinil rose despite lower earnings, but definitely the reason telecom shares were up today was because of being defensive stocks," Moussa said.
Landline monopoly Telecom Egypt rose 1.5 percent and mobile firm Mobinil inched 1.3 percent higher.
Traders said the death of Al-Qaeda’s Osama bin Laden in a firefight with US forces is not affecting Middle East markets.
"Bin Laden is dead but the rest of his organization is there and he was not working alone. If there’s any effect at all it will be on the US market and it will be faintly positive," said Ashraf Akhnoukh, senior equity sales trader at CIBC.
