Egyptian equities were headed for their best month since 2012 as optimism over the nation’s economic program overshadowed concern over a hijacked EgyptAir flight.
The EGX30 Index climbed 1 percent to 7,567.46 at the close. That brings the gauge’s increase this month to 23 percent, the steepest jump since January 2012. Global Telecom Holding led the advance on Tuesday as about 12 million shares traded, or 60 percent more than the stock’s six-month average. The hijacked plane, an EgyptAir flight from Alexandria to Cairo, was diverted to Larnaca by a passenger claiming to be wearing an explosive belt. He was arrested hours after landing in Cyprus.
A government official, speaking on condition of anonymity, said the hijacker was most likely motivated by a personal relationship. Cyprus’s Rik TV said he had an ex-wife in Cyprus and had requested a letter be delivered to her.
While the incident is yet another blow to Egypt’s tourism industry, which is already reeling from the bombing of a Russian passenger jet over Sinai in October, investors are focused on the government’s plan to boost economic growth, according to Mashreq Capital DIFC Ltd. Egypt unveiled a long-awaited economic program on Sunday to secure foreign aid and investment crucial to reviving its economy. The central bank this month raised its key interest rate by the most since at least 2006 after devaluing the currency.
“The stock market in Egypt is more focused on financial and structural issues, more so than security and politics, especially because of all the changes the government has made to attract investment,” Reda Gomaa, a Dubai-based money manager at Mashreq Capital, said by telephone. “The hijacking is a complete non-event. The country won’t respond to an incident between a man and his ex-wife.”
The government has been fighting a long-standing dollar shortage that has hampered investment and made it difficult for foreigners to repatriate funds.
Global Telecom rose 5.9 percent to 3.07 Egyptian pounds, the highest level since May. Palm Hills Developments SAE added 2.1 percent to 2.87 pounds, the strongest level since June.