Egyptian stocks traded in the green for the second consecutive day on Wednesday, capitalising on orderly and trouble-free parliamentary elections.
The benchmark EGX30 index gained 0.82 per cent for the day to close at 4,020 points. The broader EGX70 index similarly rose by 0.92 per cent.
As for preliminary polling results suggesting a landslide victory for Islamist parties, capital market expert Mostafa Badra says it remains unclear how the market would react to such a development.
"The important issue here is that the electoral process continues in a calm and violence-free manner," he said. "High voter turnout and the polls’ orderly organisation sent a very strong message to the market about Egypt's political future."
"Such results have already brought many Egyptian investors back to the market," Badra added. "But we’ll have to wait and see what the Islamists’ attitude will be towards direct and indirect investment.”
Real estate development company Talaat Mostafa Group (TMG), whose chairman Tarek Talaat Mostafa is contesting elections in Alexandria, was the highest traded share on Wednesday. TMG shares generated LE41.1 million ($6.85 million) worth of trades, accounting for 14 per cent of the day's total turnover of LE287.3 million.
Last week, TMG's contract for its Madinaty development project was ruled valid by an Egyptian court, signalling an end to a long-running legal battle over the $3 billion scheme.
"If the market continues its upward trend, TMG could be one the highest gainers in the coming period due to its high liquidity and positive post-ruling prospects," said Ashraf Abdel Aziz, head of institutional sales at Arabia Online Securities.
Blue chip Telecom Egypt (TE), meanwhile, jumped a whopping 6.72 per cent to close at LE14.14 per share. Abdel Aziz said that TE’s gains represented a rebound after the company’s share price had recently fallen to very low levels.
Egyptians accounted for 58.46 per cent of the day’s total trades, becoming net buyers at LE1 million. Arab investors, meanwhile, were main buyers at LE10.5 million, accounting for 8.1 per cent of total trades.
Foreigners, on the other hand, represented net sellers, accounting for LE11.42 million in trading.
"We saw foreign investors buying when the market was declining, and now they’re selling to realize gains on their investments," said Badra. "If the political scene remains calm, we could see a return of foreign capital to the market."
The two largest shares in terms of market capitalization, Orascom Construction Industries (OCI) and Commercial International Bank (CIB), came in second and third in terms of daily turnover at LE24.2 million and LE20 million, respectively.
OCI dropped 0.49 per cent to close at LE216.78 per share, while CIB gained slightly, rising 0.78 per cent to finish at LE14.14 per share.
Six of October Development & Investment (SODIC), Egypt’s third largest real estate developer, fell 1.55 per cent to close the day’s trading at LE11.47 per share. On Wednesday, the company posted third-quarter net losses of LE38 million.
Also on Wednesday, a Cairo criminal court was expected to open a case against SODIC for alleged corruption.