Egyptian stocks climbed to the highest level in three weeks after the first round of voting on the country’s draft constitution, which has divided Islamists and opposition groups, passed peacefully.
Orascom Construction Industries, Egypt’s largest publicly traded company, climbed 3.6 percent. Commercial International Bank Egypt SAE, the biggest lender by market value, gained for the third time in four days. The EGX 30 advanced 2.7 percent to 5,303.62 at the close in Cairo, the highest since Nov. 22, bringing the gain in the past four days to 6.6 percent. The Bloomberg GCC 200 Index of the biggest companies in the Gulf Cooperation Council rose 0.2 percent.
All except one stock on the 30-member index gained, while government borrowing costs fell after yesterday’s vote, which followed a wave of protests against President Mohamed Mursi’s efforts to push the charter through, sometimes escalating into violent clashes. About 57 percent of voters approved the constitution in the first round, held almost two years after Hosni Mubarak was toppled, according to the Muslim Brotherhood, Egypt’s biggest political group, which supports Mursi.
“The overall picture says we’re moving forward with no violence,” Ramy El Agamy, Cairo-based institutional sales manager at NBK Capital Securities Egypt, said by phone. “To the market, ‘yes’ means International Monetary Fund loan and parliamentary elections, both of which minimize systematic risk.”
Results will be announced after the second Dec. 22 round. Supporters argue the charter will pave the way for economic recovery while opposition groups say it lays the ground for Islamist dominance while failing to protect basic rights.
Plans on Hold
Egyptian shares are still down 2.5 percent since Nov. 22, the day Mursi issued a decree to expand his powers. Mursi, an Islamist politician elected in June, also suspended tax increases before the referendum and his government asked the IMF to postpone a decision on an application for a $4.8 billion loan, originally slated for Dec. 19.
Orascom Construction Industries rose to 252.06 Egyptian pounds. Commercial International Bank gained 3.7 percent, the most in a week, to 34.08 pounds.
Egypt raised 1.5 billion pounds of three-month Treasury bills and 3.5 billion pounds of nine-month notes at an auction today, according to central bank data. The average 91-day yield fell for the first time in four weeks, declining 26 basis points, or 0.26 of a percentage point, to 12.98 percent. The 273-day average yield lost 21 basis points to 13.46 percent.
Elsewhere in the Middle East, Dubai’s DFM General Index fell 0.5 percent and Abu Dhabi’s ADX General Index gained 0.1 percent. Saudi Arabia’s Tadawul All Share Index increased 0.4 percent. Kuwait’s gauge and Qatar’s QE Index advanced 0.1 percent. Oman’s MSM30 Index retreated 0.2 percent while Bahrain’s market was closed for a holiday.
Israel’s TA-25 Index fell 0.9 percent. The yield on the benchmark 5.5 percent bonds due 2022 dropped six basis points to 3.7 percent.