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Egyptian stocks gain on Arab grants

Deposits by Qatar and Libya and a prospective loan from Turkey seem to have reassured investors

Ahram Online, Sunday 14 Apr 2013
Stocks
(Photo: Reuters)
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Egypt's stock exchange continued its gaining streak on Sunday, boosted by positive news about Arab countries supporting Egypt's battered economy.

The main index gained a healthy 1.32 percent to sit at 5,300 points, reducing its losses since the beginning of 2013 to just 2.97 percent. Total market turnover reached LE345 million.

"Investors’ confidence has been reinforced as they see countries help ailing Egypt by pumping billions of dollars into the central bank," said Eissa Fathi, the vice head of the securities division at Cairo Chamber of Commerce.

"This has a stabilising effect on the exchange rate of the Egyptian pound against the dollar, which was investors' main worry in the past period."

The US dollar recorded LE7.2 on Sunday in the parallel market, a significant decline from last week's historical rates when the exchange rate reportedly reached as high as LE8.10.

This drop is prompted by last week's pledge by Qatar and Libya to provide Egypt with a total of $5 billion in the form of deposits in the central bank and US dollar denoted treasury bonds to boost the economy and supporting Egypt’s dwindling foreign reserves, which stand at a critical level of $13.4 billion.

In addition, on Saturday, the upper house of parliament approved a $1 billion loan from Turkey.

Commercial International Bank (CIB), Egypt's largest listed bank, was the session’s most active share, marking LE64 million in turnover and gaining a solid 3.2 percent, to close at LE30.8 per share.

Real estate was the most active sector, seeing total trading volume of LE73 million, mainly driven by Palm Hills Development (PHD) and Talaat Mostafa Group (TMG) which gained 1.41 and 2.45 percent, respectively.

Non-Arab foreign investors were the main buyers today, marking LE27 million in net buys. Egyptian investors, on the other hand, were the main net sellers at LE24.5 million.

“Egyptians were net buyers since last week. It’s normal that they sell now for the profit-taking process,” Fathi told Ahram Online.
EFG-Hermes, Ezz Steel and Orascom Construction Industries all gained 2.7, 2.09 and 0.8 percent respectively.

Out of 167 shares traded on Sunday, 118 shares gained while 28 dropped and 21 remained unchanged.

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