Egypt Stocks Advance to Two-Month High on IMF Loan Prospects
Egypt’s shares climbed to the highest level in more than two months after the International Monetary Fund said it plans to resume talks on a possible loan seen as crucial to preventing a disorderly currency devaluation.
The benchmark EGX 30 Index advanced 1.2 percent to 5,804.24, the highest since Oct. 29, at the close in Cairo. Commercial International Bank Egypt SAE (COMI), the country’s biggest publicly traded lender, surged to the highest since Nov. 14. Private equity firm Citadel Capital SAE (CCAP) rose for a seventh day. The pound, which has weakened to a record after the central bank introduced an exchange-rate policy seeking to conserve foreign reserves, slid 0.6 percent to 6.4823 a dollar, data compiled by Bloomberg show.
“The IMF loan at the moment is viewed as the only short term catalyst that could lift the pressure off the currency,” said Wafik Dawood, director of institutional sales at Cairo- based Mega Investments Securities.
The government expects an IMF technical team to arrive in Cairo within three weeks to resume talks on a $4.8 billion loan, presidential spokesman Yasser Ali said in a televised interview today. Egypt delayed the agreement last month amid political unrest that prompted President Mohamed Mursi to suspend tax increases related to the program.
The central bank started daily dollar auctions Dec. 30, capping the amount each bank can buy after it said currency reserves fell to a “critical” level. International reserves plunged almost 60 percent since the ouster of Hosni Mubarak in 2011 to $15 billion, enough for about three months of imports.
Egyptian officials, including Mursi and Prime Minister Hisham Qandil have “expressed their firm commitment to articulate and implement a homegrown macroeconomic program that enjoys broad support,” Masood Ahmed, head of the IMF Middle East and Central Asia Department, said in a statement after concluding a visit to Cairo yesterday.
Commercial International Bank climbed 2.9 percent to 37.94 pounds. Citadel Capital rose 1.7 percent to 4.23 pounds. The company plans to invest $4 billion in Egypt and east Africa this year, Chairman Ahmed Heikal said in an interview today.
To contact the reporter on this story: Alaa Shahine in Dubai at firstname.lastname@example.org
To contact the editor responsible for this story: Alaa Shahine at email@example.com