Egypt stocks hit five-month high

The benchmark EGX 30 Index surged 2.5 per cent to 5,508.78, poised for the highest since February 27, in early afternoon Cairo trading.

The measure has gained 0.9 per cent this year, compared with a jump of 17 per cent for the Bloomberg GCC 200 Index, of the biggest companies in the Arabian Gulf. Six of October Development & Investment climbed 5.7 per cent, leading the list of 27 gainers, while Commercial International Bank Egypt, the country’s biggest publicly traded lender, surged to the highest since January.

The central bank cut the benchmark deposit and lending rates to address “downside risks” to the economic growth outlook and reduced the rates by 50 basis points to 9.25 per cent and 10.25 per cent, respectively.

The cut will probably boost banks and other financials, Cairo-based EFG-Hermes Holding said in an e-mailed report on Sunday. The Egyptian economy is facing its worst economic slump in two decades, with the median of 17 economists estimating growth this year of 2.1 per cent.

“The interest rate cut shows movement on the central bank’s part to stimulate the economy and it’s being well- received by investors,” Teymour El Derini, director of Middle East and North Africa sales trading at Cairo-based Naeem Brokerage, said by phone. “The political tension remains but it’s going to take something drastic to bring this market down as sentiment is high.”