Most Egyptian bank shares slid on Sunday, weighing down the market overall, after Britain's Barclays Bank appeared to pull out of the race to buy Misr International Bank (MIBank), dealers said. State-owned Banque Misr, which owns 25.5 percent of MIBank, said it had received offers from Societe Generale and BNP Paribas for a controlling stake in MIBank, but there was no mention of any bid from Barclays.
The stock exchange had previously said Barclays was interested in acquiring MIBank. Officials from Barclays in Cairo could not immediately be reached for comment.
"The two French banks are the only banks in the running for MIBank. There's a question mark there. Why would it (Barclays) run through the whole process and then pull out at the end," said Yasser Hassanein at Dynamic Securities.
Shares in MIBank last traded down 3.09 Egyptian pounds ($0.54), or 6.1 percent, at 47.47 pounds.
Other banking stocks, such Egyptian American Bank (EAB) which is also seen as an acquisition target, fell on the back of the MIBank news. EAB last traded down 3.71 pounds, or 3.7 percent, at 96.00 pounds.
The benchmark Hermes index ended down 220.20 points, or 0.5 percent, at 42,263.38 points. The broader CIBC index dipped 0.11 point, or 0.1 percent, to 145.78 points.
Elsewhere in the banking sector, National Bank for Development (NBD) bucked the downward trend.
It last traded up 0.42 pounts, or 5 percent, at 8.86 pounds on the back of last week's news that Commercial International Bank had begun preliminary due dilligence work that could lead to the acquisition of NBD, dealers said.
CIB shares last traded down 0.41 pounds, or 0.9 percent, at 47.50 pounds.
In the telecoms sector, Egypt's two mobile phone operators ended modestly higher.
Dealers said some investors expect good results from Egyptian Company for Mobile Services (MobiNil), helping the stock to last trade up 0.33 pounds, or 0.2 percent, at 173.54 pounds.
INTERBANK RATE DIPS:
The median overnight interbank rate on the Egyptian pound dipped to 9.55 percent on Sunday from Thursday's 9.625 percent because demand for pounds fell at the end of a two-week period for calculating reserves, bankers said.
Most banks squared their positions last week before the end of the current reserve period on Monday, so few banks needed funds and those with spare cash were ready to accept low rates, the bankers said.
Overnight rates do not dip below 9.5 percent because the central bank guarantees to take overnight deposits at that rate.
Four of the eight banks contacted by Reuters dealt in overnight money, citing rates from 9.51 to 9.75 percent, compared with a range of 9.5625 to 10 percent on Thursday.
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