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Market Report: Egypt's Bourse ends week in green, buoyed by elections

Main index climbs a further 1.7 per cent, pushed upwards by a surge in high-cap buys from individual Egyptian investors

Ahram Online, Thursday 1 Dec 2011
Egyptian Stock Exchange
A view shows the Egyptian Stock Exchange in Cairo (Photo: Reuters)
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Egyptian stocks rode the election wave to a third consecutive day of gains in the week's final trading session, driven upwards by resurgent trade in high-cap firms from local investors.
 
The benchmark EGX30 climbed 1.69 per cent to close Thursday at 4,087.9 points.
 
"The euphoria of Egypt elections is still ruling the stock market," said Issa Fathy, vice president of the securities division in Cairo's Chamber of Commerce, pointing to a return of healthier volumes after weeks of choked trade.
 
Turnover reached LE318.9 million, "significantly above the average of the past three months," Eissa said.
 
The opening stage of Egypt's first free elections in six decades took place on Monday and Tuesday, passing off relatively peacefully and belying fears of violence. Smooth polling, which looks like delivering a victory to Islamist parties, spurred a climb of over 5 per cent for major stocks on Tuesday.
 
"For the past five sessions, Egyptians have been on a clear buying spree for multiple political reasons," Fathy said, citing last week's speech from Egypt's de factor ruler Field Marshal Hussein Tantawi pledging a handover to civilian rule by mid-2012, a forthcoming new cabinet and a vow by the ruling military not to crackdown on a sit-in that still occupies Cairo's Tahrir Square.
 
Of the day's 184 listed stocks, 148 climbed in value. All sectors finished in the green but five which remained unchanged -- a performance that jolted the broader EGX70 up 2.74 per cent.
 
Egyptians were the day's sole net-buyers, scooping up LE24.5 million worth of stocks. Resurgent interest in high-cap, and now bargain-priced, stocks saw firms like the Commercial International Bank gain 3.74 per cent and Palm Hills Development and the Talaat Moustafa Group climb 2.34 and 2.73 per cent respectively.
 
Foreigner investors were net-buyers to the tune of LE13.9 million, but Fathy denied this was driven by worries over an Islamist-dominated parliament.
 
"These selling decisions are tainted by last week's violence and unrest," he said. "Foreign buying will remain hesitant until the whole transition period comes to an end."
 
Among the stocks offloaded by foreign investors were those in Juhanya, picked up by Egyptians at LE34 per share. Recent days have seen non-Egyptians stage large-scale sell-offs in Citadel Capital and Oriental Weavers, Fathy said.
 
A turnaround for such investors -- who typically make up around a third of the market -- would come in due course, he added.
 
"Foreign insitutions have a time-lag between political events in Egypt and their investment decisions -- not like Egypt's individual investors who take quick decisions, sometimes on an emotional basis."
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