Egypt Stocks Rally to September High After Currency WeakensTamim Elyan
Egyptian stocks advanced to the highest level since September as a decline in the pound sparked investors’ appetite for real estate shares.
The benchmark EGX 30 Index rose 2.1 percent to 9,804.18 at the close in Cairo. Property developers led gains by percentage change as Palm Hills Developments SAE and Talaat Moustafa Group climbed 4.4 percent and 4.2 percent respectively.
The pound has weakened 2.1 percent against the dollar this week to 7.3 in interbank trading, headed for the biggest weekly retreat since January 2013. Currency reserves dropped to $15.3 billion in December, posting a decline of 10 percent last year. The central bank cut the benchmark interest rate by half of a percentage point to 8.75 percent on Jan. 15.
“Retailers are buying in real estate stocks as rising inflation is expected and this means higher real estate prices,” said Mostafa Abdel Aziz, head of brokerage at Beltone Financial Holding Co., in a phone interview. “They usually have the fastest response to an interest rate cut and dollar appreciation.”