Egypt stocks reached a three-week high on Wednesday as turnover levels partially recovered on the heels of the holiday season and political stability.
Main index EGX30 gained 0.82 per cent to close at 3,766 points and build up a 4 per cent growth since the beginning of 2012.
"Liquid stocks were able to make use of the increase in turnover as the political scene remains stable," says Ashraf Abdel Aziz, head of sales at Arabeya Online Securities. "Also the end of the holiday season drove investors back to the market,"
Egypt’s holiday season began with the western Christmas on 25 December until the eastern Christmas on 7 January, which took its toll on turnover, pulling it to the lowest levels in ten years.
Total turnover reached LE180.7 million ($30 million) with Egyptians dominating trade at 67 per cent, foreign investors at 26 per cent and Arab investors at 7 per cent.
Real estate and basic resources sectors led the market growth gaining 3.44 and 3.69 per cent respectively.
Talaat Mostafa Group (TMG), the largest listed real estate developer, saw an impressive 5.03 per cent growth to close at LE3.13 per share. It was the second most traded share, marking LE22.7 million in turnover.
"TMG is among the most solid companies fundamentally. The problem it was facing with land allocation was very straight forward and was resolved so the share is recovering," Abdel Aziz explained.
Last November, an Egyptian court ruled TMG's land contract for its Madinaty project valid, ending a long-running legal battle over the $3 billion scheme.
Other real estate companies saw their shares gain, with Palm Hills Development and Amer Group finishing up at 3.6 and 1.82 per cent, respectively.
Similarly, Ezz Steel share gained 4.5 per cent to close at LE3.95 per share. "The steel conglomerate is growing over the momentum following news it will reach reconciliation with the government regarding its new plant license," said Abdel Aziz.
License for two new plants for Ezz Steel were withdrawn last September. News that the company is close to reaching an agreement with the Industrial Development Authority (IDA), however, boosted the Ezz's share, according to Abdel Aziz.
Beltone Financial, a leading Cairo based investment bank, saw its stock price drop 10 per cent to close at LE14. Volume of trade on the stock, however, marked an insignificant LE14,000.
The broader index, EGX70, gained a minor 0.08 per cent. This index includes small and medium shares that are preferred by individual Egyptian investors who were net buyers today at LE7.3 million.
"Most investors were focused on the market leading stocks in EGX30; which are underpriced. Currently, EGX70 stocks are not as attractive," Abdel Aziz Added.
Out of 168 shares traded today, 108 gained while 48 dropped.
Arab investors were the main net-sellers at LE10.2 million, while non-Arab foreigners were net buyers at LE3 million.
Market leaders such as Orascom Construction Industries and Mobinil gained 1.45 and 2.56 per cent, respectively.