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Talaat Leads Real-Estate Rally Amid Inflation Bets: Cairo Mover

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April 11 (Bloomberg) -- Talaat Moustafa Group jumped the most in six months, leading gains in Egyptian real estate shares, on speculation property sales will grow as higher inflation boosts demand.

Egypt’s biggest publicly traded property developer advanced 4.9 percent, the most since Oct. 10, to 4.08 pounds at the close in Cairo, extending a rally this month to 11 percent. Palm Hills Developments SAE posted the biggest gain since September. The benchmark EGX 30 Index increased 1.5 percent to 5,231.47.

The rally in property shares is driven by “inflation-hedge plays which could trickle in improved earnings and also genuine demand for real-estate companies in Egypt,” said Teymour El-Derini, Cairo-based director of Middle East and North Africa sales trading at Naeem Brokerage.

Talaat Moustafa’s net income is set to climb 16 percent this year, the first profit growth in five years, according to the average estimate of seven analysts in a survey compiled by Bloomberg. Egypt’s inflation rate rose to a nine-month high of 8.2 percent in February before easing to 7.6 percent in March. Economists at investment banks EFG-Hermes Holding SAE and CI Capital forecast consumer prices will accelerate amid a currency depreciation.

The pound has weakened 7.4 percent this year as the central bank took steps to limit the availability of dollars to conserve foreign currency reserves, data compiled by Bloomberg show. The EGX 30 Real Estate Index is up 8.9 percent this month, outperforming the EGX 30’s 2.6 percent gain.

Talaat Moustafa shares increased on volume of six million shares, double the three-month daily average. Palm Hills increased 6 percent to 2.13 pounds. Heliopolis Housing and Six of October Development & Investment Co. gained 4.7 percent and 1.9 percent, respectively.

To contact the reporter on this story: Ahmed A. Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net

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