Egyptian bourse inches up, led by Raya and CIB

Main Egyptian stock indexes rose on Thursday as shares in technology and communications firm Raya surged following an offer by Orascom Telecom to buy all issued shares in the firm, traders said.Raya shares surged 5.5 percent to close at 13.01 Egyptian pounds, higher than the 12 pounds per share that Orascom was offering to pay for Raya. Raya’s chairman has described the offer as naive.

“Many investors thought that if there ever will be a deal, it won’t happen at the low price of 12 pounds, so they wanted to buy the stock now, boosting its price,” Yasser Hassanein of Dynamic Securities said.

“On the other hand, the rationale of the deal for Orascom Telecom is not clear yet, so investors were wary about the stock,” he added.

Orascom Telecom Chairman Naguib Sawiris said buying Raya would strengthen the retail and distribution business in two key markets, Egypt and Algeria, and would help achieve better economies of scale with the company’s main handset suppliers.

OT Shares were slightly up by 0.2 percent to 77.80 pounds.

Overall, the well watched CASE 30 index rose 0.5 percent to close at 8,469.51 points, while the benchmark Hermes index edged up 0.2 percent to 74,311.30 points. The broader CIBC index dipped 0.2 percent to 346.67 points.

Commercial International Bank (CIB), one of Egypt’s top private banks, gained 3.1 percent to 71.53 Egyptian pounds as market talk of a possible move to acquire rival Arab African Bank continued, traders said.

CIB Vice-Chairman Sahar el-Sallab declined earlier to confirm the news, and Arab African officials were not available for comment.

“Usually before week ends, we see people selling to cash out their gains but today we saw huge buying especially in market leaders, especially banking,” said Mohamed Radwan of Delta Securities.

Other market leaders also did well, with Egyptian mobile operator Mobinil gaining 0.4 percent to 189.90 pounds on the back of “the deal to acquire the third generation license at last,” Radwan said.

Egypt’s Communications Ministry said on Wednesday it had agreed to grant mobile operator Mobinil a third-generation mobile licence for $599 million.