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Egypt stocks rise on trouble-free charter poll

EGX30 rises 2.72 pct on violence-free constitutional polling; Analysts predict further gains based on prospects for continued political stability

Ahram Online, Sunday 16 Dec 2012
Egypt stocks
Egyptian traders chat at Egypt's benchmark stock in Cairo (Photo: AP)
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Views: 1291

 Egypt's stock market staged a partial recovery on Sunday after three weeks of market fluctuation, as Egyptians cast ballots in a contentious constitutional referendum.

Egypt's benchmark EGX30 index rose by 2.72 per cent to reach almost 5,302 points. The broader-based EGX70 also witnessed a healthy 2.97 per cent rise.

Thousands of Egyptians lined up at polling stations in ten out of Egypt's 27 governorates to vote on a controversial draft charter. Fortunately, voting was conducted in the absence of any serious incidents of violence.

According to unofficial polling results, around 56 per cent of Egyptian voters endorsed the constitutional draft.

"Signs of political stability, and the easing of the political standoff that the country has seen in recent weeks, definitely helped the market recover," Ashraf Abdel-Aziz, head of institutional sales at the Cairo-based Arabia Online Securities, told Ahram Online.

Around 153 stocks recorded gains on Sunday, led by heavyweight shares Orascom construction Industries (OCI) and Commercial International Bank (CIB), which surged by 3.61 and 3.65 per cent respectively.

"The first phase of the referendum will definitely boost investor confidence, with hopes that a new constitution will bring an end to Egypt's bumpy post-revolution political transition" said Abdel-Aziz.

Daily turnover, meanwhile, climbed to a relatively impressive LE498 million by the end of the trade session, after hitting record lows in recent weeks.

"The slow recovery of trade volume is a good sign; it will probably witness further rises with increased political stability," asserted Abdel-Aziz.

Analysts, however, believe it is still too early for the stock market to achieve pre-revolution turnover rates, as structural economic reforms have yet to be put in place by the government.

Egyptian and Arab investors were net sellers for the day, selling off LE29 million and LE4 million in stocks respectively. Foreign investors, meanwhile, were net buyers, picking up some LE33 million worth of shares.

Bucking recent trends in the banking sector, National Society General Bank (NSGB) continued to plunge, declining by 4.71 per cent as Thursday's QNB deal continued to adversely affect the share's performance.

The real estate sector led the market in terms of turnover, recording almost LE102 million – one fifth of total market activity – with Talaat Mostafa Group Holding (TMGH) and Palm Hills rising by 2.89 and 4.48 per cent respectively. 

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