CAIRO: Egypt's benchmark stock index rose nearly three percent on Sunday after the country's central bank slashed interest rates to support economic growth. The CASE 30 index, down 22 percent this year to Thursday's close, gained 2.65 percent to 3,696.26 points. The central bank cut its key overnight interest rates by 100 basis points and said on Friday it would act to support economic growth. "The news about the interest rate cut on Thursday is quite postive for the market, said Hashem Ghoneim, vice chairman of Pyramids Capital in Cairo. "We would like to see the reaction tomorrow when the foreigners are back in the business. Shares of Orascom Construction, Egypt's largest publicly traded builder, led gains, surging 7.81 percent to LE 113 ($20). "There was strong institutional buying going on today on Orascom Construction, Ghoneim said. "Valuations are cheap. Orascom Construction is trading at 3.73 times 2008 earnings, the eighth-lowest on the CASE 30 index, according to Reuters data. Shares of El Sewedy Cables, the largest Arab cable maker by market value, jumped 7.49 percent to LE 45.90. "All the market rebounded except Sewedy, so Sewedy is getting cheap by valuation, Ghoneim said. "Investors are hunting for cheap stocks that did not rebound. Shares of Sewedy have fallen 20 percent this month to Thursday's close, compared to an index decline of 7 percent. The Hermes index climbed 2.27 percent to 352.36 points and the broader CIBC index gained 0.64 percent to 237.1 points. -Reuters
