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Market Report: Egypt benchmark index rises on ex-tourism minister jail news

The market witness an exceptional upturn for the third day, this time sparked by the news of the 5-year jail sentence slapped on ex-tourism minister, Garana

Bassem Abou Alabass, Wednesday 11 May 2011
Egypt
workers at Egypt's stock exchange market (Photo: AP)
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Egypt's bourse welcomed the news of the five-year prison sentence announced today for former tourism minister, Zoheir Garana.

EGX30 continues its upward trend for the third consecutive day as the main index bounds 0.91 per cent to 5,002 points, with the largest turnover (LE571.7 million) in a month.

“This bullish trend is just temporary," predicts Marian Azmy, financial analyst of HC Securities. She sees Garana's news as a temporary push, while the glum reality of the economy continues to shower the market.

Broader indices have also ended Wednesday’s session in green to reach 0.63 per cent and 0.70 per cent for EGX70 and EGX100, respectively.

“We have to wait for two weeks, at least, to make sure that our market is recovering, not just three sessions,” she comments.

Of 182 listed stocks, 102 gained, 66 declined and 14 are unchanged.

Unlike the rest of the market, the corruption-related companies dragged down relative sectors, like real estate and travel & leisure.

"Real Estate shares all fall down, still heavily affected by the political turmoil" says Omar Darwish, equity sales trader in Ci Capital.

Darwish clarified that with the resignation of the chairman of SODIC, a large land developer, their shares dipped by 3.05 per cent and had a similar affect on Palm Hills Development Co, dropping its shares by 3.09 per cent.

Arabs were net buyers in today's session, accounting for  LE21.3m, while foreigners and Egyptians turned to net sellers, respectively achieving LE14m and LE 7.3m after two days of purchasing activity.

“We couldn't find clear reasons for why foreigners and Egyptians were net sellers,” comments Marian.

Ezz Steel shares gained 2.3 per cent.

OCI raised 1.75 per cent after the company reported a 77 per cent jump in its first-quarter net profit on Wednesday and said it was confident infrastructure spending would accelerate, despite political turmoil in the Middle East.

“Almost all construction companies saw their net profit drop, except OCI,” Marian added.

CIB shares gained around 0.14 per cent, in spite of pessimistic expectations of its net profit in Q1/2011.

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