National Societe Generale Bank rose the most in more than two weeks on bets shareholders will benefit from the Egyptian pound’s depreciation as its parent sells a majority stake to Qatar National Bank SAQ.
Shares of NSGB advanced 3.3 percent, the most since December 12, to 35.21 Egyptian pounds at the close in Cairo, valuing Egypt’s second-biggest publicly traded lender at 15.6 billion pounds ($2.5 billion). Doha-based QNB said earlier this month it will pay France’s Societe Generale SA $1.97 billion for 77 percent of NSGB. The transaction will probably close in the first half, Paris-based SocGen said.
While the two banks reached an agreement on the “nominal value” of the transaction, the tender offer price for the pound-denominated shares will be set “based on the foreign exchange rate prior to the sale’s execution,” said Mohamed Radwan, head of international sales at Cairo-based investment bank Pharos Holding. QNB has also said it plans to bid for the remaining shares that SocGen doesn’t own in compliance with Egyptian regulation.
The Egyptian pound, subject to a managed float, weakened to a record low as the central bank started selling dollars in auctions to restrict demand for the currency after foreign reserves plunged almost 60 percent since last year’s uprising. The currency weakened 2.8 percent today to 6.3639 a dollar, according to central bank data on Bloomberg.
Two analysts recommend investors buy the shares of NSGB, while five have a hold rating on the stock and eight say sell, according to data compiled by Bloomberg.
Dollar-denominated stocks have also gained. Egyptian Kuwaiti Holding Co., a Cairo-based private equity firm, rallied 4.1 percent to $1.28, the highest level since Oct. 29. Offshore services company Maridive & Oil Services rose 3.6 percent to $1.16, the highest close since Sept. 30.
Other stocks that stand to gain from the pound’s depreciation against the dollar are Orascom Construction Industries, Egyptian Financial Group-Hermes Holding, Orascom Telecom Holding SAE and Orascom Telecom Media and Technology Holding SAE, Radwan said.