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Egypt's stocks up despite low turnover as investors react to energy price hikes

EGX30 up 0.76 percent but daily turnover was weak on Sunday as investors adopted a 'wait-and-see' approach to fuel and electricity price increases

Ahram Online, Sunday 6 Jul 2014
Workers at Egypt
File photo: Workers at Egypt's stock exchange market are seen in the trading hall in Cairo (Photo: AP)
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Egypt's indices were on the rise but turnover remained weak on Sunday as investors grappled with the possible consequences of a steep hike in fuel prices introduced over the weekend.

The benchmark EGX30 index rose 0.76 percent to 8,321 points, as daily turnover recorded a modest LE447 million.

"Investors are adopting a wait-and-see approach to the recent economic events, as it is uncertain what effect they will have" Eissa Fathy, vice president of the securities division at Cairo's Chamber of Commerce, told Ahram Online.

The government implemented an up to 78 percent hike in the prices of major state-subsidised fuels on Friday, a day after raising the price of household electricity by up to 67 percent.

Saturday saw scattered protests and scuffles in the capital as well as other parts of the country in reaction to the new prices, which mark the first such changes in an antiquated state-subsidy system which Prime Minister Ibrahim Mehleb said had not been touched in 40 years.

"This is prompting fears of inflation and social unrest among investors, who otherwise see the measure as positive, hence the hesitancy," said Fathy.

Egyptians were net-sellers, for LE7.6 million, while Arab and other foreign investors were net-buyers for LE4.5 million and LE3.1 million, respectively.

Most of EGX30's shares were up, among them real estate share Six of October Development and Investment (SODIC), which rose 3.23 percent to trade at LE35.48.

In the same sector, TMG Holding saw its share price climb 1.16 percent to LE8.72.

Market bellwether Commercial International Bank (CIB) gained 0.99 percent to trade at LE35.6.

EFG-Hermes, on which there has been a tender offer for a 20 percent stake at LE16 a share, saw its share price rise 1.11 percent to LE15.42.

According to traders who spoke to Reuters, the bidders, a consortium led by Egyptian tycoon Naguib Sawiris and Cairo-based Beltone Financial Holding, had received 48 percent of the stake they had sought on Sunday, the last day of the offer.

The broader EGX70 index rose 0.94 percent.


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