Egyptian stocks were set to extend their record winning streak as investors bet last week’s currency devaluation will boost the economy of the most populous Arab nation. Abu Dhabi shares fell as traders cashed in following the biggest jump since January.
The EGX 30 Index rose 0.5% as of 12.51pm in Cairo, extending its advance for a 12th day, the longest rally since Bloomberg started tracking the measure in 1998. About 261-million shares traded, compared with a one-year full daily average of 198-million. Abu Dhabi’s ADX General Index retreated the most in two months.
Undeterred by the biggest interest rate increase in at least 10 years, investors piled into Egyptian stocks after the central bank weakened the currency 13% last week, the most since 2003. The devaluation was part of policy makers’ plan to lure foreign investment and alleviate a dollar shortage that has crippled North Africa’s biggest economy. The EGX 30 entered a bull market this month and is now up 32% from a two year-low in January.
Egypt’s stocks are “seeing a clear trend reversal,” said Cairo-based Ashraf Akhnoukh, the manager for Middle East and North Africa at Commercial International Brokerage Co. “Investors are taking in positive signals from the central bank as officials finally move to address the dollar shortage.” The rate increase was already priced in, he said.