OCI deal pushes stock up The stock benchmark rose again on Monday after a five-month high recorded the day earlier, following the completion of the Orascom Construction Industries (OCI) deal and a recent interest rate cut by the central bank. The EGX 30 index closed with a 1.5% surge at 5615.36 points on Tuesday, while the EGX 70 index, encompassing small and medium sized companies, saw a modest rise of 0.53%. The broader index EGX 100 increased by 0.71%. This rise is a result of positive sentiments caused by the OCI deal, said Ashraf Abdel Aziz, head of institutional sales at the Cairo-based Arabia Online Securities. OCI was delisted from the stock exchange after its mother-company, OCI NV, the Netherlands-based global nitrogen fertiliser producer, successfully acquired 97.44% of its shares. Abdel Aziz also attributed the rise to the latest decision of the Central Bank of Egypt to cut interest rates. On 1 August the central bank lowered its main overnight interest rate by 50 basis points, taking the overnight deposit rate to 9.25% and the overnight lending rate to 10.25%. Abdel Aziz believed the new head of the stock market has also positively affected stock transactions, especially since the bourse was without a leader for an extended period. “I expect the coming period to be profit gaining; investors will tend to sell instead, especially with the beginning of a long vacation of Eid El-Fitr, during which clashes may break out and it will consequently affect the stock,” he said.
Posted on: Tue, 06 Aug 2013 10:33:03 +0000
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