Egypt’s Arabian Food Industries (Domty) surged on its bourse debut on Tuesday, helping to spur buying in other Cairo stocks.
Domty rose 11 percent to 10.21 Egyptian pounds ($1.15). It had sold 12.25 million shares in a public offering this month at 9.2 pounds per share, with the sale hugely over-subscribed.
“Domty is up on decent volumes and this is affecting the rest of the market – investors are keen to buy Domty at a premium to the IPO price, which is giving confidence that the prices of other stocks are also at attractive levels,” said Mohamed Radwan, Head of Equity Sales at Pharos Securities in Cairo.
“It’s still early in the session and I’d expect profit-taking to increase as the market cools off.”
The main index climbed 0.7 percent to 7,547 points, taking its gains to 15 percent since March 14’s currency devaluation.
Investors seem to hope the pound’s lower value will attract foreign fund inflows, helping resolve the country’s longstanding foreign exchange shortage. Monday’s close was the benchmark’s highest since Nov. 5.
“There should be a sell-off from current levels,” added Radwan, citing technical support at around 7,000 points.
Commercial International Bank, Egypt’s largest listed company by market value, rose 0.2 percent, and fellow heavyweight Orascom Construction added 0.4 percent.
In Saudi Arabia, the index climbed 0.3 percent to 6,508 points, taking its gains since mid-January’s five-year low to 19 percent as blue-chip stocks advanced.
Saudi Basic Industries Corp (SABIC) rose 1 percent, while rival lenders Al Rajhi Bank and National Commercial Bank each gained 0.5 percent.