Stock indices hit a record rise at the end of Thursday’s session when New Egypt Investment, a company owned by businessman Naguib Sawiris, and Beltone Financial Holding offered to buy 20 percent of EFG Hermes for LE16 a share in a deal worth up to LE1.8 billion.
The offer, the first of its kind since the 25 January revolution, ignored the negative effects of the new capital gain tax.
The main EGX30 index rose by 4.71 percent to 8498.6 points, the small and medium stocks EGX70 index rose by 3.77 percent to 599.2 points, and the broader EGX100 index rose by 3.82 percent to 1047.9 points.
Total trading exceeded the LE1 billion barrier to a record LE1.2 billion and the capital market earned LE16.1 billion.
Traders said the deal saved the dealers who incurred losses from the new tax. “It proved that the Egyptian market is still at the top of the emerging markets that have promising investment opportunities,” said financial expert Ihab Saeed.
Sherif Samy, head of the Financial Supervisory Authority, said the deal was done in all clarity and transparency. “The price was higher than the market value, which prompts the authority to approve the deal,” he said.
“The minimum time required for the deal to be implemented is 10 days,” he explained. “And it can be revised five days before the final decision to go ahead with it.”
Bank of New York Mellon owns 13 percent of Hermes, Dubai Group 11.7 percent, Dar Al-Tamleek 11.05 percent and Abdel Moneim Al-Rashed 7.72 percent, with an LE5 nominal value of shares.
Sawiris would own 17.82 percent and Beltone 2.18 percent. Both would have the upper hand in the company's general assembly.
Edited translation from Al-Masry Al-Youm
