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Market Report: Egypt benchmark slips 1 pct on IMF loan delay

High-cap stocks see mixed performances as country's planning minister says loan will not be signed until June while foreign reserves take another dip

Ahram Online, Tuesday 3 Apr 2012
Egypt exchange
Main index takes a hit as Commercial International Bank loses ground (Photo: AP)
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Egyptian stocks slipped back into the red on Tuesday as the country's planning minister warned of a delay in signing a long-awaited $3.2 billion loan with the International Monetary Fund and worrying new central bank figures further jangled investor nerves.

The benchmark EGX30 closed Tuesday down 0.97 per cent at 4,907 points, wiping out the previous day's marginal gains. From 173 listed stocks, 71 gained in value and 85 declined, and the rest remained unchanged. The broader EGX70 slid a marginal 0.02 per cent.
 
"The market is seeing a general slowdown due to the current political wrangling [in the run-up to presidential elections] and news of a delay in IMF funding," said Hisham Halaldeen, Head of Research Sales at Naeem Holding. 
 
"The fact that Egypt's foreign reserves may fall to a critical level is also hurting sentiment."
 
Egypt's central bank announced on Monday the country's foreign reserves had dropped a further $600 million to reach $15.12 billion. 
 
Though the fall was smaller than in previous months, economists still expressed worry as the figure crept ever nearer the minimum needed to cover two months of vital imports.
 
Adding concern was the same day's announcement from Planning Minister Faiza Abu El-Naga that the signing of Egypt's much-debated IMF loan would be pushed to June. 
 
The IMF has stipulated that the government must first sell its reform plans to the country's political forces before it agrees to grant a loan. The global body also wants Egypt to line up billions of dollars in additional loans from other international donors.
 
An IMF technical team returned to Cairo last week to iron out details.
 
Turnover was just over LE377 million ($61.9 million) with over a quarter of the day's trade focused on a tug-of-war between two high-cap stocks in the banking and telecoms sectors.
 
The Commercial International Bank (CIB), whose performance typically reflects foreign sentiment, bore the brunt as investors staged sell-offs to profit from Monday's rally, sparked by rumours the bank was planning a capital increase.
 
CIB shares finished the day down 4.11 per cent after LE54 million worth of trade
 
The performance of mobile operator Mobinil, which saw its share of trade to LE58.9 million in the final minutes of trade, cushioned the main index from greater losses.
 
Mobinil stocks closed the session up 0.21 per cent as investors await definite news on a reported imminent takeover by France Telecom. 
 
NSGB also saw its shares nudge up 0.48 per cent after an announcement from the bank that all members of the families of Mohamed Mansour and Ahmed Maghrabi, two former Mubarak-era ministers, had collectively resigned from their boards.
 
Weighing down the index, however, were further losses for Orascom Telecom, which slipped over 2 per cent, and financial firms Beltone and Pioneers, down 1.69 and 0.27 per cent respectively.
 
Real estate stock took a partial hit too with the nation;s third-largest developer SODIC slipping 0.26 per cent after reporting government plans to reclaim land it was previously granted.
 
Stock in the Talaat Moustafa Group slipped 0.76 per cent but Palm Hills Developments managed to go against the tide. The day's fifth largest stock, it ended the session up a solid 3.68 per cent.
 
Domestic investors and other Arabs were net-buyers to the tune of LE21.3 million and LE37.49 million respectively. Foreign investors failed to share their optimism, with overseas institutions contributing to their net sale of LE662.7 million worth of stocks.
 

"Foreigners are still waiting and watching how political events will pile up," Omar Darish of CIBC brokerage told Reuters.

"We think they may go in before the presidential election if a better picture emerges."

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