[2008-01-31]  OT M&A speculation helps Egypt bourse inch higher
Market speculation that regional mobile operator Orascom Telecom (OT) may be planning an acquisition in South Korea pushed Egyptian shares higher on Wednesday, brokers said.

One Orascom Telecom executive had no immediate comment on the speculation and Chairman Naguib Sawiris could not immediately be reached.

"There were rumours that OT may be (planning for) an acquisition in South Korea," said Mohamed Fouad, Institutional Desk Director at Prime Securities. "This drove the entire telecom sector up."

Shares in OT, the fourth-biggest Arab telecom firm by market value, last traded 2.5 percent higher at 82.52 Egyptian pounds ($14.85).

Shares in Telecom Egypt soared 5.4 percent to 21.50 pounds, while Mobinil closed slightly lower at 218.50 pounds a share hours ahead of releasing its annual results.

Trading took place despite a major disruption in Egypt's Internet services after a cut in an undersea communications cable. Two brokers, however, said the disruption caused trading to slow down and affected some international orders.

"It (the disruption) had a very negative impact on the stock market today," one trader said. "At times, we were trading blind," he added.

Stock market officials were not available for comment.

Orascom Construction Industries, another market heavyweight, last traded 0.2 percent higher at 573.50 pounds a share.

"We still have a positive outlook for the market in the short and medium term," Mohamed Ashmawi of CIBC brokerage said.

Investors were eyeing another hefty interest rate cut by the U.S. Federal Reserve to follow up on its emergency 0.75 percent rate cut last week to boost markets and ease worries about a possible U.S. economic recession.

Fouad said housing shares, led by Medinet Nasr Housing which rose 8 percent to 60.75 pounds, also helped the bourse inch higher. Shares in the firm continued a bullish run on news it agreed on a 5 billion pound joint venture with Egypt's Katameya Heights earlier this week.

Shares in real estate developer Talaat Moustafa also rose 2.3 percent to 12.25 pounds hours before the firm's 2007 results were due to be released.

Source: © Reuters 2008.