CAIRO: Banks led Egypt’s main index higher, with pledges of financial support from foreign states outweighing caution ahead of a planned protest in central Cairo’s Tahrir Square this Friday.
Traders said Tuesday’s decision to put former president Hosni Mubarak on trial may be enough to placate protesters who say Egypt’s interim rulers have dragged their heels in holding the former president to account.
"I think the news that Mubarak will face court has created the sentiment that there are not going to be any clashes between the regime and protesters on Friday," said Osama Mourad.
Concerns violence could flare at the protest — dubbed a second revolution by some groups — knocked the index on Tuesday before the Mubarak news. The index recovered ground on Wednesday, ending up 1.2 percent.
EFG-Hermes was the index’s top gainer, jumping 9.2 percent after Egypt’s regulator approved the investment bank’s plan to boost its capital.
Heavyweight Commercial International Bank (CIB) rose 3.2 percent after Credit Suisse upgraded the stock to "outperform" from "underperform," citing the benefits of global aid inflows into Egypt.
"We’ve been seeing a lot of international aid coming in which is boosting investors’ morale," said Mohamed Radwan, head of equities at Pharos Securities.
A pledge of $4 billion in support from Saudi Arabia sent shares to a six-week high on Sunday. The World Bank and the International Monetary Fund have also vowed to help the economy.
Nader Khedr, an investment and capital market analyst, said the index may struggle to hold gains due to security worries.
"We have very positive news coming from the International bank, the IMF and the G8 regarding economic support, however these funds are not expected to save the economic situation unless the security situation is settled," he said.
