Shares in Commercial International Bank (CIB), Egypt’s biggest listed lender, surged on Sunday, pushing the stock market index higher.

The bank announced on Thursday that its board of directors has approved a capital increase to 50 billion Egyptian pounds ($2.8 billion), up from 20 billion pounds.

On Sunday, CIB was the second-best performer on the exchange, rising 2.56 percent, just behind Sixth of October Development and Investment Company, which added 4.89 percent.

Egypt’s EGX30 gained 1.18 percent on Sunday, boosted by the jump in the shares of CIB and Sixth of October. The market index has gained 3.76 percent so far this year.

“Since the beginning of the year, the (Egyptian) market witnessed (an) upward move as a result of positions reallocation after a weak performance in late 2018,” Ahmed Helal, senior financial analyst at Okaz Stockbrokers and Investments Consultants, told Zawya.

The market is “expected to perform well in the short term supported by some news announcements or actions related to major EGX (Egyptian) stocks,” Helal added.

CIB has gained 2.58 percent in value so far since the start of 2019, outperforming a Thomson Reuters index of Egyptian bank stocks which has gained 1.25 percent during the year. In 2018, the bank lost 4.23 percent of its value.

In late November 2018, Egypt’s cabinet gave preliminary approval to a proposed amendment to the way bank taxes are calculated. Shares in banks like CIB dropped on concerns over the proposed law at first, but then recovered most of the losses incurred. (Read more here).

According to data from Eikon, two analysts have a 'strong buy' rating on the stock, while six analysts have a ‘buy’ rating and four analysts have a 'hold' rating.

The bank’s chief digital officer and head of global transaction services told a conference in Dubai late in September 2018 that CIB is pressing ahead with plans to create a digital bank. (Read more here).

CIB reported a third quarter 2018 consolidated net profit attributable to shareholders of 2.59 billion Egyptian pounds, compared to 2.09 billion Egyptian pound for the same period last year - a 24 percent increase.

Elsewhere in the region, Saudi Arabia’s index jumped 1 percent on Sunday, while Dubai’s index edged 0.3 percent lower on Sunday, Kuwait’s premier market index ended 0.37 percent higher, Bahrain's index edged 0.2 percent higher, Abu Dhabi’s index gained 0.13 percent, Qatar's index was mainly flat and Oman’s index dropped 0.15 percent.

(Reporting by Gerard Aoun; Editing by Michael Fahy)

(gerard.aoun@refinitiv.com)

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