Egypt Stocks Rocket 3 pct as US Embassy Clashes End

Egyptian stocks rocketed back into the green after violent demonstrations outside Cairo's US embassy came to an end and trade swelled to its highest level since mid-2011. A marketwide rally saw the benchmark EGX30 index climb 2.82 per cent to close at 5,821.7 points. From a total of 183 stocks changing hands, 168 gained in value and just 10 declined, with turnover hitting LE1.024 billion ($168m). "There's a general optimism that's reflects sentiments over the global economy and the US Federal Reserve's new stimulus plan," Walaa Hazem, asset manager at HC Securities, told Ahram Online. "The lack of substantial violence in Cairo at the weekend and the ending of protests at the US embassy also helped." Egyptian security forces stormed Tahrir Square and streets near American diplomatic premises, arresting dozens of enraged protesters who'd been engaged in days-long demonstrations against an anti-Islam film made in the US.

Egyptian stocks rode out the first two days of unrest, only to plunge 1.4 per cent on Thursday as sustained street fighting engulfed parts of Cairo's Garden City and Tahrir Square. Also boosting confidence in global stocks on Sunday was the US Federal Reserves' new plan to kickstart the US economy by buying $40 billion every month in mortgage backed securities until the labour market sees solid improvement. Egyptian market heavyweights EFG-Hermes, Orascom Construction Industries and the Talaat Moustafa Group saw the most sustained trade, with the latter gaining 5 per cent and the others not far behind.

Recent favourite EFG-Hermes saw a further boost with news that shareholders had approved its planned tie-up with Qatar's QInvest. Shares in the country's largest steelmaker Ezz Steel also soared a substantial 6.55 per cent shrugging off its report of a 24 per cent quarter-on-quarter fall in net income. Lower-cap shares did even better, with the broader-based EGX70 index soaring 4.5 per cent. With the non-Islamic world mainly on holiday, Egyptians made up over 82 per cent of trade although they sold LE39.958 million more in stocks than they bought. By contrast, other Arabs and non-Arab foreigners constituted a small presence, but both proved net-buyers.