Shares of CIB Hit Record, Lifting Egypts Index

Shares of Commercial International Bank (CIB) surged to a record high on Monday after it said it was studying a merger.

Shares of Commercial International Bank (CIB) surged to a record high on Monday after it said it was studying a merger, lifting Egypt's benchmark Case 30 index to a fresh all-time high.

CIB shares jumped 4.1 percent to 80 Egyptian pounds ($14.34) after the bank said it has agreed to conduct due-diligence with Arab African International Bank.

"People are assuming there could be a stock swap at a price higher than the market price," said Hashem Ghoneim, chief executive of El Nour Securities. "There are rumours the price could go as high as 100 pounds."

A senior CIB executive confirmed the deal but declined to give further details.

"The new bank will have about 8 percent share of market assets making it a national banking private champion," said Hatem Alaa, banking analyst at HC Brokerage.

CIB helped lift the Case 30 index to its second day of record highs. The index rose nearly one percent to 8,766.29 points. The well watched Hermes index gained 0.73 percent to 76,810.45 points.

Shares of Elsewedy Cables gained 2.6 percent to 93 pounds. Ghoneim said investors anticipating growth in third-quarter profit on the back of the company's regional expansion were buying the stock.

"The company is expanding in Sudan, Syria, and Saudi Arabia," he said. "People are expecting a good performance in the third quarter," he added, without giving specifics.

Shares of Orascom Telecom edged down after the company said it would bid for Egypt's second fixed-line license.

Shares of the company slipped 0.09 percent to 73.85 pounds.

Egypt's broader CIBC index gained 0.29 percent to 385.43 points.

($1 = 5.58 Egyptian pounds)