CAIRO: Commercial International Bank and other financials lifted Egypt’s main index to a 1 percent gain, a day after the central bank cut its reserve requirement on local currency deposits, traders said.
The central bank said on Tuesday the requirement would be lowered to 12 percent from 14 percent, in a move aimed at providing banks with more cash to lend to the government and to businesses.
CIB, Egypt’s biggest private bank by assets, jumped 3 percent and investment bank EFG-Hermes added 1.8 percent.
“There was positive news from the central bank that will improve liquidity in local banking circles and in the market,” Hisham Halaldeen of Naeem Brokerage said.
“This is good for bank earnings but nevertheless we are still waiting for significant institutional interest to return to the market,” he added.
Volume remains thinner than before, traders said, as foreign and institutional investors wait for more clarity on Egypt’s economic outlook and a hoped-for loan from the IMF.
Egypt has asked for a $3.2 billion loan from the IMF to help stave off a fiscal crisis.
“The prices are attractive, but investors are not putting up fresh money to buy stocks. They are just trading,” said Heba Saleh of Arab Finance Brokerage, adding that mixed statements from parties on whether they were fielding candidates for the country’s presidential elections were adding to the uncertainty.
Orascom Telecom Media and Technology shed 0.7 percent. The company said last month it had reached a preliminary accord to sell most of its stake in Mobinil to fellow shareholder France Telecom.
It said it would give shareholders much of the $1 billion it stands to gain from the Mobinil deal. France Telecom would also offer to buy all other Mobinil shares on the bourse.
Mobinil closed near-flat, but optimism the deal will soon be completed is likely to boost the firm’s shares in coming sessions, with further gains likely to follow, traders said.
“OTMT will be the dark horse in the market in upcoming months,” said Amr El-Feky of Cairo Capital Securities.
The index closed at 5,134 points.