Devaluation Fears Up Egyptian Stocks
World Economy

Devaluation Fears Up Egyptian Stocks

Egyptian stocks had the biggest advance in almost four months, leading gains across most Middle Eastern markets, as traders speculated the country may devalue its currency as early as Tuesday.
The EGX 30 Index jumped 4.7% at the close in Cairo, with trading volumes on the main gauge 157% above the average of the past 20 days. Commercial International Bank of Egypt, the nation’s biggest publicly traded company, advanced 5.3%. Saudi Arabian stocks rose the most in more than a month as investors prepared for the release of financial results, Bloomberg reported.
Egypt is suffering a hard-currency shortage that’s prompted the government to plan a Eurobond sale and start informal talks with the International Monetary Fund. Traders are betting the country may weaken the pound as soon as Tuesday, when the central bank holds its weekly sale of dollars to local lenders, according to Arqaam Securities Brokerage.
“Foreign exchange is Egypt’s biggest problem, the elephant in the room that needs to be dealt with now,” said Radi Elhelw, the Cairo-based executive director for Arqaam.
 “Fortunately, we’re seeing signs from the government that it’s moving to do that. Local institutions are buying the market aggressively, which is justified. But we think it’s a bit premature because the government needs ample liquidity to defend the pound, which it doesn’t have right now.”
Central Bank Governor Tarek Amer has been able to add about $1 billion to Egypt’s international reserves since taking office in November to reach $17.5 billion, about $6.5 billion short of what he said he needed to allow the market to determine the pound’s value.
Real estate stocks were among the biggest winners on bets of a cheaper currency. Talaat Moustafa Group, the country’s most valuable developer, soared 7.6%, taking its two-day gains to 14%. The EGX 30’s real estate index is up 12% since the central bank commented on its currency policy last week.


Short URL : http://goo.gl/MEpOzK
  1. http://goo.gl/AmDhqp
  • http://goo.gl/bnpfkt
  • http://goo.gl/szmYRO
  • http://goo.gl/wehoUI
  • http://goo.gl/9n2IQP

You can also read ...

Deutsche Bank CEO John Cryan (L) and ECB President Mario Draghi at a conference in Frankfurt on Sept. 6.
The head of Germany’s biggest private lender wants the...
President Emmanuel Macron (C) signs a set of executive orders making sweeping changes to France’s complex labor laws on Friday.
France’s private sector expanded the most since May 2011,...
Portugal Budget Deficit Narrows
Portugal’s budget deficit narrowed to 1.4% of gross domestic...
The People’s Bank of China
China’s small banks are struggling to raise funds through...
Analysts say the outlook for Britain’s public finances had “weakened significantly” with Brexit likely to put further pressure  on the country’s economic strength.
Moody's cut Britain's long-term credit rating Friday, citing...
Italy Hikes Growth Forecast
Italy on Saturday raised its forecasts for economic growth...
ASEM Urges Free Trade
Economic leaders at the Asia-Europe meeting reached a broad...
Brazil Frees Up $4b in Gov’t Spending
Brazil’s government has freed up 12.8 billion reais ($4.1...