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Tuesday, 29 September 2020

Market Report: EGX30 defies analysts' expectations to make second day of losses

Egypt's Bourse continues its downward trajectory but shares in Talaat Mostafa buck the trend after court delays its ruling on the trouble firm's flagship project

Bassem Abo Alabass and Ahmed Feteha, Tuesday 21 Jun 2011
Egyptian Stock Exchange
A trader works at the Egyptian Stock Exchange (Photo: Reuters)
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Egypt's stock benchmark finished Tuesday's session in the red for the second consecutive day, dropping 0.93 per cent to reach 5.529.24 points and defying analyst's predictions that yesterday's high equities turnover suggested the fall would be a one-off.

The EGX30 index climbed to 5,628.09 points in Sunday trade, its highest level in three months.

"The market is taking a downturn as the hype following aid promises to Egypt is fading,” says Omar Darwish, senior equity trader at CI Capital.

"There are growing concerns in the market that Egypt will not be able to raise funds; especially as it is getting less than it asks for in short-term debt."

From the 181 listed shares, 33 gained and 144 declined with a market’s turnover of LE533m, significantly down from Monday's LE666.6m.

Egyptians were the only net-buyers, purchasing LE59.4m in shares, while Arabs and foreigners were net-sellers of LE18.7m and LE40.7m respectively.

Real estate was the only market sector spared a tumble, led into the green by shares in Talaat Mostafa Group (TMG), which saw high turnover of LE36m and gained 2.1 per cent on the news of a court case postponement.

The administrative court today delayed a ruling on the fate of TMG's disputed Madinaty land until October, in light of a new judicial report which claims the land was acquired legally

"The real estate sector has been doing relatively well over the past couple of weeks due to the attractive prices of shares and the reconciliation with the investors announced by the Prime Minister,” says Nael Sedqy, senior equity trader at Naeem Holding.

Pioneers Holding shares surged by 1.3 per cent and is listed as one of the top choices for insiders’ sales over the last two weeks. The company sent a statement to the Egyptian Stock Exchange earlier on Tuesday, in which it denied claims the General Attorney had banned members of the company’s board of directors, Yasser Zaki and Waleed Zaki, from travel.

Shares in heavyweight Ezz Steel dropped 2.2 per cent, while the telecoms sector stayed in the red after a dip in all three listed companies: OT down 2.1 per cent, Mobinil 0.36 per cent and Telecom Egypt 0.26 per cent.

"OT has been one of the most stable stocks in the market after 25 January thanks to its merge with VimpelCom last month and the optimism surrounding the deal," adds Darwish.

Orascom Construction Industries (OCI) finished down 0.7 per cent following a report that the Ministry of Petroleum had started arbitration proceedings against the Egyptian Fertilizer Company, an OCI subsidiary also owned by Nassef Sawiris, after the company refused to pay the new higher gas prices demanded by the government.

"The market negative reaction came quickly to the news, but trading volumes were not alarming," says Sedqy.

The broader EGX70 and EGX100 indices also saw losses, both down 0.81 per cent

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