Egyptian stocks jumped the most in the world on Monday as investors speculated an offshore natural gas discovery would end a domestic supply shortage and earn the country billions of dollars in export revenues.
The benchmark EGX 30 Index climbed 2.8%, the most among 93 gauges tracked by Bloomberg, to 7,252.43 at the close in Cairo. That pares the measure’s decline this month to 11 percent, compared with a 9.4% drop for MSCI Inc.’s emerging-market index.
About 607 million Egyptian pounds ($78 million of shares traded), the highest in almost two months.
Eni SpA said yesterday it discovered a “super giant” natural gas field in Egypt’s Mediterranean waters that may hold 30 trillion cubic feet of the fuel. That’s 46% of the North African country’s current reserves and may translate into $48 billion of revenue for the government after Eni’s share is accounted for, according to a report by EFG-Hermes Holding SAE, Egypt’s biggest investment bank.
Gas shortages have become more pronounced in the country since the 2011 Arab Spring, forcing the government to cut supplies to factories and implement rolling power outages.
The gas find means “downside risks to the valuation of Egyptian equities have materially subsided,” Hany Genena, the chief economist and equity strategist at Cairo-based Pharos Holding, said in an e-mailed report. Industrial companies, which have suffered from gas supply shortages, will be prompted to revive expansion plans within the next year, and“we expect foreign direct investment, whether green field or acquisitions, to recover sharply in sync,” he said.
Ezz Steel, Egypt’s biggest manufacturer of the metal, surged 7.5% the most in more than three months. Commercial International Bank Egypt SAE, the country’s biggest- listed lender, increased 3.5%.
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