Egypt Stocks Rise to Three-Year High on EFG-Hermes; Qatar Gains

Egyptian shares rose to a three-year high amid the heaviest trading in 16 months on EFG-Hermes Holding SAE’s stock buyback and before a referendum this week. Qatar’s gauge increased to the highest since 2008.

The benchmark EGX 30 Index climbed 2 percent to 7,116.81 at the close in Cairo, the strongest close since before the start of the uprising that ousted President Hosni Mubarak in January 2011. Shares valued at more than 1 billion Egyptian pounds ($144 million) traded, the most since September 2012 and almost three times the one-year daily average. EFG-Hermes, the country’s biggest investment bank, surged 9.7 percent to 10.74 pounds.

“EFG-Hermes is one of the market’s bellwether stocks,” said Tariq Hussein, co-head of MENA Sales Trading at Cairo-based CI Capital. “The surge in shares of EFG-Hermes is inevitably having a knock-on effect across the board and buoying market sentiment.”

Twenty-three of the gauge’s shares advanced after the country’s biggest investment bank said Jan. 9 it would buy back 1 billion pounds of its stock, paying investors 11.5 pounds a share in the first phase. Egypt’s benchmark stock index has gained 4.9 percent this month after climbing 24 percent last year.

Egyptians head to the polls this week to vote on a new military-backed constitution amid a boycott by Islamists that back ousted President Mohamed Mursi. The referendum would pave the way for parliamentary and presidential elections this year, according to the military’s plan.

Triple Volume

The Egyptian government sold $1.07 billion of one-year dollar-denominated treasury bills at a record low 2.59 percent compared with 2.64 percent in December. The funds will cover a similar amount of debt maturing this week. Yields at an auction of three- and nine-month notes also fell to 10.34 percent and 10.82 percent, respectively.

Commercial International Bank Egypt SAE, the nation’s biggest publicly traded lender, gained 1.2 percent to 33.48 pounds, the highest since 1997. The exchange will close tomorrow to mark an Islamic holiday.

Qatar’s benchmark QE Index, one of the world’s five best-performing indexes this year, rose for a ninth day, the longest winning streak since February 2012. The measure gained 0.5 percent to 10,922.36, the highest since August 2008. Qatar National Bank, the country’s biggest lender, advanced 1.3 percent to 176.70 riyals, the highest since Aug. 22.

‘Dividend Play’

“There is a dividend play and that was the reason for the rise,” Wadah Al Taha, the chief investment officer at Dubai-based Al Zarooni Group, said by phone today.

Qatar National Bank may announce a dividend this week. The bank, which has announced a payout every January since 2010, said Jan. 13, 2013 it will pay a 6-riyal dividend, according to data compiled by Bloomberg.

Saudi Arabia’s Tadawul All Share Index advanced 0.4 percent, while Bahrain’s and Oman’s gauge were little changed. Kuwait’s measure fell 0.4 percent. The Dubai Financial Market and the Abu Dhabi Securities Exchange are closed for an Islamic holiday.

In Israel, the TA-25 Index rose for the first time in three days, gaining 0.5 percent at the close in Tel Aviv. The yield on the government’s debt maturing in March 2023 dropped six basis points, or 0.06 of a percentage point, to 3.59 percent.