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Market Report: Egypt stocks inch up despite cabinet delay

Main index is up a tiny 0.02 per cent as solid performances for some banks and real estate firms cushion losses for other high-caps

Ahram Online, Wednesday 18 Jul 2012
Egypt's stock benchmark ends in green(Photo: Reuters)
Views: 619
Views: 619

Egyptian stocks made hesitant overall gains on Wednesday as delays in the formation of the country's new government and the coming of Ramadan put the brakes on trade.

The benchmark EGX30 traded in the red for much of the day, only inching 0.02 per cent up to 4,819.5 points in the session's final minutes. The broader EGX70 edged a scarcely-better 0.17 per cent.
"Investors are hesitant and playing it safe, they are unsure what's going to happen in the political arena," said Mostafa Badra, a Cairo-based market expert.
"The day's modest performance has taken us back to the state of the market before the presidential elections."
Total turnover was a mild LE204.67 million ($33.7m), significantly less than the level to which is soared just after the Muslim Brotherhood's Mohammed Morsi was confirmed as Egypt's new president in late June.
That market rally tailed off after a week, with the stock exchange returning to the doldrums in which it lay in spring: one day modestly up, the next slightly down. Despite this, the EGX30 has gained some 33 per cent since the beginning of 2012.
Analysts say the latest wrangles between Morsi and Egypt's military government over the status of parliament, and delays in the announcement of the country's new prime minister and cabinet, have made investors wary.
The holy month of Ramadan, which begins 20 July and sees the exchange cut back its trading hours, is going to bring a more predictable, seasonal slump in trade.
From the day's 162 traded stocks, 49 gained in value and 90 declined with the remainder holding steady.
Seeing the heaviest trade was the Commercial International Bank, responsible for LE36 million of the day's turnover, which slipped 0.17 per cent.
Further behind were fellow high-caps Citadel Capital, Telecom Egypt and OTMT. Each saw around LE22 million in trade, but slipped 0.68, 0.31 and 2.44 per cent, respectively.
It was financial institutions and real estate that were left to cushion the fall, with firms like Sixth of October Development (up a solid 1.4 per cent), the National Societe General Bank (which gained 0.58 per cent) and the Talaat Moustafa Group (rising 0.5 per cent) balancing the index.
Automobile assembler GB Auto was one of the day's biggest gainers, up a healthy 5.5 per cent.
Non-Arab foreigners were the day's biggest net-buyers, albeit by a thin margin of LE4.89 million. Egyptians, similarly, bought LE2.26 million more stocks than they sold, with other Arabs being the sole net-sellers.
Individual investors outranked institutions to account for 54 per cent of the market.
Wednesday's muted performance may be the first of many, suggested Badra, saying that current stasis when it comes to economic policy-making and foreign investment make it unlikely the market will see a major short-term boost.
"Given the current circumstances we can't be either very optimistic or very pessimistic over the stock market," Badra said.
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