[2007-12-06]  Orascom Construction powers Egypt shares to record
Shares in Orascom Construction Industries powered Egypt's benchmark index above 10,000 points for the first time in its history on Tuesday.
The index, which has risen 43 percent this year, climbed above 10,000 points during the session before closing at 9,998.24 points, up 1.4 percent.
"Foreign and Arab investors are buying," said Tarek el-Khayyat, senior trader at Delta Securities. "Our market is one of the best in the MENA (Middle East and North Africa) region in terms of company growth."
Shares in Orascom Construction, which posted a 40 percent rise in nine-month net income last month, gained 2.1 percent to 527.05 Egyptian pounds ($95.30).
Rumours the company may split its stock, divide itself into separate cement and construction firms, or give a special dividend were driving the stock, said traders including Teymour el-Derini at Beltone Financial.
"All three rumours are positive for the stock," he said.
Orascom Construction officials could not immediately be reached for comment.
Shares in Orascom Telecom, the fourth-largest Arab mobile operator by market value, extended gains after it said on Monday its nine-month profit more than doubled as subscriber numbers jumped.
The share rose 1.6 percent to 87 pounds.
"I expect it to get to the 90-pound level," Derini said. "The company has a lot of cash on hand after the sale of Iraqna and Hutchinson and the stock has a way to go."
Orascom Telecom agreed to sell its Iraqi mobile unit Iraqna for $1.2 billion, Orascom Chairman Naguib Sawiris said this month. The company also sold a 3 percent stake in Hutchison Telecommunications International Ltd last month for HK$1.5 billion ($193 million).
Shares in Commercial International Bank rose for a second session as investors deemed them cheap relative to earnings expectations for the bank, Khayyat said.
The bank is trading at 15.15 times forecast 2007 earnings compared to a sector average of 20.15 times, according to Reuters data.
A rumour the lender's potential merger with Cairo-based Arab African International Bank, announced in October, might be completed this year also help drove the share up, Khayyat said.
"People are optimistic about the biggest banks in Egypt merging," he said. "This would be very good for our financial sector."
Egypt's Hermes index rose 1.26 percent to 87,903.39 points after hitting a record high during the session of 87,954.35 points. The broader CIBC index climbed 0.31 percent to 397.03 points.
Source: © Guardian News and Media Limited 2007