OCI deal pushes stock up

Hend El-Behary
2 Min Read
Last July, Mehleb's government approved imposing a 10% tax on dividends in addition to another 10% tax on capital gains earned from investment in the stock market, but it halted the decision, citing maintaining market competitiveness. (Photo by Mohamed Omar)
The stock benchmark rose again on Monday after a five-month high recorded the day earlier, following the completion of the Orascom Construction Industries (OCI) deal and a recent interest rate cut by the central bank. (Photo by Mohamed Omar)
The stock benchmark rose again on Monday after a five-month high recorded the day earlier, following the completion of the Orascom Construction Industries (OCI) deal and a recent interest rate cut by the central bank.
(Photo by Mohamed Omar)

The stock benchmark rose again on Monday after a five-month high recorded the day earlier, following the completion of the Orascom Construction Industries (OCI) deal and a recent interest rate cut by the central bank.

The EGX 30 index closed with a 1.5% surge at 5615.36 points on Tuesday, while the EGX 70 index, encompassing small and medium sized companies, saw a modest rise of 0.53%. The broader index EGX 100 increased by 0.71%.

This rise is a result of positive sentiments caused by the OCI deal, said Ashraf Abdel Aziz, head of institutional sales at the Cairo-based Arabia Online Securities.

OCI was delisted from the stock exchange after its mother-company, OCI NV, the Netherlands-based global nitrogen fertiliser producer, successfully acquired 97.44% of its shares.

Abdel Aziz also attributed the rise to the latest decision of the Central Bank of Egypt to cut interest rates.

On 1 August the central bank lowered its main overnight interest rate by 50 basis points, taking the overnight deposit rate to 9.25% and the overnight lending rate to 10.25%.

Abdel Aziz believed the new head of the stock market has also positively affected stock transactions, especially since the bourse was without a leader for an extended period.

“I expect the coming period to be profit gaining; investors will tend to sell instead, especially with the beginning of a long vacation of Eid El-Fitr, during which clashes may break out and it will consequently affect the stock,” he said.

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