To avert a possible currency crisis, the Central Bank of Egypt has started foreign exchange auctions. Thanks to the same, the Egyptian stock prices have surged to a week high figures. The benchmark index of Egypt, The EGX 30 has surged ahead by 0.5% and is at 5442.37 currently. This marks the highest close of the index since 20th December. The overall trading volume was 13% more in comparison with the 20-day average.
The Central Bank of Egypt has decided to ease the pressure on the foreign reserves of this African country, which has seen a slide of 60% and is at $15 billion now. Incidentally, the plunge is being witnessed after the ousted of former President Hosni Mubarak. The auction debuted today and around $75 million has been sold to the banks.
Mohamed Radwan, who is the head of equities department of Pharos Holding for Financial Investment, stated that the market is reacting to this positive measure of Central Bank as many investors now believe that the International Monetary Fund deal can ultimately be finalized. Incidentally, the recent unrest in Egypt resulting due to the decree of President and constitution resulted into IMF delaying the loan worth $4.8 billion. The delay was actually requested by the Government of Egypt so that the unrest can settle down and certain economic policies can be undertaken. The Government is reportedly planning for an increase in the taxes. The major currency of the country, Egypt Pound has seen a decline of 1.2% on December, whereas, the forward contracts are expected to drop by 15% in this year. On the other hand, The EGX 30 has gained a total of 50% in 2012.
The largest publicly traded company in Egypt, Orascom Construction Industries gained for the 3rd straight day. Today, it increased by 0.4% and is at 252.60 Egyptian pounds marking the highest level since 19th December.
The renowned telecom company of the country, Telecom Egypt Co. has also gained 0.6% reaching the highest figure of 14.17 Egyptian Pounds, in last 2 months. The previous highest close was experienced on 6th November. The announcement that the company will receive a mobile-phone license has attributed to this gain, according to analysts. Telecom Egypt’s mobile phone license cost will be decided with cooperation from a global advisor, as announced by the company’s official representatives.