Egypt Stocks Rise From Month Low on Dialogue Calls to End Unrest
Egypt’s stocks rose from the lowest in almost one month on bets the nation’s opposition groups may be willing to meet with President Mohamed Mursi on steps to put an end to violence that’s left dozens dead in the past week.
Commercial International Bank Egypt SAE (COMI), the nation’s biggest publicly traded lender, advanced 1.9 percent. Orascom Telecom Holding SAE (ORTE) rose to the highest level in almost 11 months. The benchmark EGX 30 Index (EGX30) climbed 1.5 percent, the most since Jan. 3, to 5,576.01 at the close in Cairo.
Reform leader Mohamed ElBaradei called for a meeting between Mursi, an Islamist, and opposition groups including the secular National Salvation Front to “take urgent measure to end violence and begin serious dialogue.” The call, which appeared on his Twitter account, comes after violence that began on the second anniversary of the Jan. 25 revolt that ousted Hosni Mubarak. Stocks fell 3.4 percent in the three trading days that followed, closing at the weakest level since Dec. 31 yesterday.
“The market is taking a breather today on the back of optimism the opposition will meet with Mursi” and reach a political resolution, said Wafik Dawood, director of institutional sales at Cairo-based Mega Investments Securities. “The heightened tensions raised question marks on the International Monetary Fund loan and the economic scene.”
Until now opposition groups have rejected calls for dialogue, eroding hopes for stability in a nation whose economy has been growing at its slowest pace in two decades since the start of the revolution. More than 50 people have died during protests since Jan. 25. The nation’s defense chief warned yesterday that political unrest could bring about the “collapse” of the state.
The unrest sent the yield on the government’s 5.75 percent dollar-denominated 2020 bonds soaring 35 basis points, or 0.35 of a percentage point, the biggest jump since June, to 6.25 percent as of 4:39 p.m. in Cairo. The yield has soared 69 basis points since Jan. 25. The pound weakened 0.1 percent to 6.6860 a dollar today, taking its drop in the past month to 7.4 percent.
Masood Ahmed, head of the IMF Middle East and Central Asia Department, said Jan. 19 a delegation may visit Cairo in the coming weeks to finalize a $4.8 billion loan deal that’s been stalled by unrest since an initial agreement was signed in November. The fund was waiting for Egyptian authorities to update an economic program attached to program, he said.
Commercial International climbed for the first time in three days, rising to 35.68 pounds. Wireless carrier Orascom Telecom advanced 1.9 percent to 4.32 pounds, the highest close since March 11.
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