Last Update 12:48
Wednesday, 25 November 2020

Market Report: Egypt shares hit one-month-high on govt solutions to legal disputes

Main index gains a further 1.6 per cent as investors react positively to government initiatives by targeting high-cap steel and real estate stocks

Michael Gunn, Ahmed Feteha, Sunday 15 Jan 2012
Egypt Bourse
Egypt Bourse sees gains for fifth consecutive session (Photo: AP)
Share/Bookmark
Views: 1089
Share/Bookmark
Views: 1089

Egyptian stocks climbed to their highest level in a month as investors reacted positively to new government initiatives to resolve legal disputes involving several of the country's leading firms.

The benchmark EGX30 saw gains for its fifth consecutive session, closing the day up 1.65 per cent at 3,840 points. The main index has grown 6.01 per cent since the beginning of 2012.
 
"There is a positive sentiment in the market especially after the breakthroughs in agreements between the government and the steel and real estate sectors," says Mohamed Metwally, equity trader at Cairo-based Prime Holding.
 
From the day's 169 listed stocks, 121 gained in value and 19 declined, in trade worth an overall LE185.3 million (US$30.8 million).
 
Biggest beneficiary was industry giant Ezz Steel which gained 6.9 per cent on news that a dispute over factory licences had been resolved with the government. 
 
Ezz was one of four steelmarkers to reach agreements with the government over withdrawn licences for manufacturing plants. Its surge helped pull the entire basic resources sector up 4.3 per cent.
 
Egypt's largest listed stock, Orascom Construction Industries gained 1.6 per cent, further lifting the main index.
 
Real estate had a good session too, with major players powered upwards by reports late last week that the government is forming a top-level commission to settle land disputes involving real estate developers without resorting to arbitration.
 
"Such a move restored faith in the system and in the future performance of developers," says Metwally.
 
Talaat Mostafa Group, which faced an epic legal battle over its Madinaty development, saw its shares edge 0.6 per cent, while SODIC and Palm Hills Development gained 1.84 and 0.84 per cent respectively.
 
Telecoms, a sector which declined over the last week, bounced back into the green on Sunday, helped by a solid gain of 3 per cent for mobile operator Mobinil.
 
Landline monopoly Telecom Egypt climbed 2.3 per cent following the announcement of a new chief executive, due to take up his position on Thursday
 
As usual for a Sunday, foreign investors had a diminished share of the market, at just 15.6 per cent. They were, however, the session's sole net-buyers, picking up LE14.9 million in stock.
 
Market turnover of just over LE185 million was "unsatisfactory", despite exceeding the average of the last month, according to Metwally.
 
"This turnover is lower than I expected and I have to ask if it's satisfactory to generate a market comeback," he says, attributing the relatively low volume to uncertainty over European markets, due to reopen Monday after last Friday's swathe of credit downgrades for countries like France and Austria by Standard and Poor's.
 
"It is only normal that investors, especially non-Egyptians are wary from injecting more funds into the Bourse," he says.
Short link:

 

Latest

© 2010 Ahram Online.