Egypt’s benchmark stock index recorded its best monthly performance in two years after pledges of financial assistance by the U.S. and Saudi Arabia boosted investor sentiment.
The EGX 30 Index has climbed 10 percent in May, the world’s third-best performer and the gauge’s best month since May 2009. Pioneers Holding, the country’s second-biggest publicly traded securities firm, led the gain, surging 38 percent and Talaat Moustafa Group Holding, the largest publicly traded real-estate developer, climbed 30 percent. Twenty-eight shares gained and two declined this month. The EGX 30 fell 1.2 percent to 5,523.36 at the 2:30 p.m. close in Cairo.
“We’re seeing improved sentiment and an increase in risk appetite for local and foreign investors,” said Wafik Dawood, director of institutional sales at Cairo-based Mega Investments Securities. “Investor participation should increase as we approach the elections because visibility should improve with an elected government.”
Egypt’s interim government expects to conclude talks on a $3 billion loan from the International Monetary Fund by June 5 as the Arab country seeks to fund its widening budget deficit after a popular revolt that ousted its president, Finance Minister Samir Radwan said yesterday. The U.S. and Saudi Arabia this month pledged a total of $6 billion to help the country’s economic recovery after tourism and industrial output declined.
The country’s ruling military council has said it intends to hold parliamentary elections in September, paving the way for its withdrawal from governance. Efforts by the transitional government to settle disputes over land sales by previous governments to developers have boosted real-estate companies.
The EGX 30 has tumbled 23 percent this year, the worst performer among 90 benchmarks globally. The index needs to gain 2.2 percent to reach the closing level on Jan. 27, the last trading day before an almost two-month suspension amid the uprising that led to the ouster of President Hosni Mubarak in February.
The country’s budget deficit may reach 10 percent of gross domestic product in the fiscal year that ends next month compared with 8.1 percent in the previous year, Radwan said yesterday.