Egypt’s Dollar Bond, Stocks Rise After Date for Vote Is Set for September

Egypt’s 10-year dollar bond rose, sending yields to a two-month low, after the ruling military council set September as the date for the first parliamentary election after the ouster of President Hosni Mubarak.

The yield on the 5.75 percent debt due in April 2020 dropped 41 basis points, or 0.41 percentage point, to 6.15 percent at 4:58 p.m. in London, according to Bloomberg composite prices. The yield is at the lowest level since Jan. 26, the day after a revolt that unseated Mubarak started. The EGX 30 benchmark stock index gained for the third day.

“This is reflecting the positive political developments we saw yesterday with the announcement of parliamentary elections and a new parties law, especially when you compare the developments here to other countries in the region,” said Moustafa Assal, head of the fixed-income unit at Cairo-based Beltone Financial. “The fact that the bourse has been able to reopen successfully is also contributing significantly to the rise in investor confidence.”

The military council eased rules governing the establishment of political parties and said the election won’t be held under the decades-old state of emergency now in place. Major General Mamdouh Shahine, a member of the Supreme Council of the Armed Forces, indicated that presidential polls would be held after the legislative vote. Mubarak ceded interim authority to the council on Feb. 11 after weeks of protests demanding political freedoms.

Two-Month Suspension

The Ministry of Finance said in a statement today it will redeem the $1 billion dollar-denominated bonds maturing in July on time. Five-year credit default swaps rose 4 basis points to 341 today, paring the decline this month to 30 basis points, according to CMA London prices.

The unrest that toppled Tunisia’s President Zine El Abidine Ben Ali and Mubarak this year has spread to countries including Yemen, Bahrain, Syria and Oman. In Libya, which borders Egypt, Muammar Qaddafi is fighting rebels who want to end his four- decade rule.

The EGX 30 Index (EGX30) jumped 3 percent to 5,409.43 at the 1:30 p.m. close in Cairo. The gauge is down 24 percent this year, making it the world’s worst performer. Egypt’s bourse resumed trading on March 23 after nearly a two-month suspension due to the turmoil that accompanied the anti-Mubarak revolt.

Shareholder Vote

Orascom Construction Industries, the nation’s biggest publicly traded builder, surged 5 percent in Cairo to 237.63 Egyptian pounds, the highest level since Jan. 26. The company is in talks to buy BASF SE’s nitrogen-fertilizer unit, two people with knowledge of the matter said. BASF spokeswoman Jennifer Moore-Braun and Orascom’s Omar Darwazah declined to comment on the sale.

Orascom Telecom Holding SAE, North Africa’s biggest mobile- phone operator by subscribers, climbed 5.2 percent to 4.43 pounds. The Cairo-based company said today shareholders will vote April 14 to double its capital to 14 billion pounds ($2.4 billion) and refinance its debt to facilitate a merger with Russia’s VimpelCom Ltd. The global depositary receipts advanced 0.8 percent to $3.80.

Egyptians voted on March 19 on a set of constitutional amendments. About 77 percent endorsed the changes, which include term limits for presidents, fuller judicial oversight of voting and fewer restrictions on presidential candidates.

To contact the reporter on this story: Alaa Shahine in Cairo at asalha@bloomberg.net Ahmed A Namatlla in Cairo at anamatalla@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler in Dubai at cmaedler@bloomberg.net

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