May 22 (Bloomberg) -- Egypt’s shares gained the most in almost two months after the U.S. and Saudi Arabia pledged $6 billion for the North African country as it recovers from a popular uprising that ousted its president.
Orascom Telecom Holding SAE surged to the highest level since October after Deutsche Bank AG raised the country’s biggest mobile-phone operator to “buy.” Ezz Steel soared 6 percent. The EGX 30 Index climbed 3 percent, the most since March 29, to 5,405.52 at the 2:30 p.m. close in Cairo. The gauge has declined 24 percent so far this year.Saudi Arabia’s $4 billion in aid will be granted in “soft loans, deposits and grants,” state-run Saudi Press Agency said yesterday, citing a statement by Egyptian Field Marshal Mohamed Hussein Tantawi, ruling military council head. U.S. President Barack Obama on May 19 pledged support, including $1 billion in loan guarantees, and canceling $1 billion in debt.“The money coming in from the U.S. and Saudi Arabia is definitely affecting the market positively,” said Ashraf Akhnoukh, senior equity-sales trader at Cairo-based Commercial International Brokerage. “It gives the government space to breathe, regardless of where the money will be spent.”The economy has suffered from inflation, a lack of investment, a budget deficit and decline in tourism since the uprising, Mohamed ElBaradei, a possible candidate for the Egyptian presidency, said in remarks to CNN’s “Fareed Zakaria GPS.” Economic growth may slow to 1 percent this year, the lowest rate in almost two decades, the International Monetary Fund said April 11. Former President Hosni Mubarak ceded interim authority to the Supreme Council of the Armed Forces on Feb. 11.‘Buy’ RatingThe yield on Egypt’s 5.75 percent note due April 2020 tumbled 33 basis points, or 0.33 percentage point, to 5.86 percent on May 19, the least since Jan. 25, according to data compiled by Bloomberg. The rate gained one basis point to 5.87 percent on May 20.The cost of protecting government debt against default for five years fell 30 basis points to 322 basis points on May 19, according to CMA prices in London. They were at 325 on May 20.Orascom Telecom rallied 4.1 percent to 4.54 Egyptian pounds. The company’s global depositary receipts were assigned a 12-month price estimate of $4.20 at Deutsche Bank. One GDR represents five ordinary shares of Orascom Telecom, according to Bloomberg data. Ezz Steel, Egypt’s largest producer of the metal, soared to 10.91 pounds, the highest since April 6.Saudi GainsSaudi Arabia’s Tadawul All Share Index increased 0.3 percent. The Bloomberg GCC 200 Index of Persian Gulf stocks rose 0.1 percent and Oman’s MSM30 Index gained 0.3 percent. Kuwait’s measure increased 0.2 percent. Bahrain’s BB All Share Index lost 0.5 percent. In the United Arab Emirates, the DFM General Index and Abu Dhabi’s ADX General Index each dropped 0.3 percent.Israel’s TA-25 Index slid 1.5 percent, the most since Feb. 24, to 1,273.97 after Obama and Israeli Prime Minister Benjamin Netanyahu made little effort to disguise their differences over the borders of a future Palestinian state after a two-hour meeting at the White House on May 20.“There is a lack of conviction with buyers,” said Omri Weissman, head of stock trading at Excellence Nessuah Investment House Ltd. in Ramat Gan, Israel. “The whole thing that happened with Netanyahu and Obama on Friday looked bad on television and there’s a fear of what international investors will do tomorrow.”The benchmark Mimshal Shiklit government bond due January 2020 gained, pushing the yield on the 5 percent bond down one basis point to 5.15 percent.--With assistance from Gwen Ackerman in Tel Aviv. Editors: Claudia Maedler, Shanthy Nambiar
To contact the reporters on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net; Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net
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