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Market report: EGX30 dips 1.4 per cent in the midweek session

Political tensions are felt by the market

Bassem Abou Alabass and Ahmed Feteha, Tuesday 12 Apr 2011
Market report
(Photo: AP)
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Egypt's benchmark stock index EGX30 dipped 1.42 per cent to reach 5,202 points in Tuesday's midweek session, with the impact of political tensions. Egyptians concerned by the events since last weekend became net sellers of LE 13.1 million, having previously been net buyers during most of the sessions since the reopening of the Bourse on March 23.

Arabs and foreigners, who represented about 50 per cent of the market, were net buyers with LE 3.8 million and LE 9.2 million respectively.

"Last Friday’s events have shadowed the market with uncertainty. Egyptians who experienced these events firsthand were more affected than foreigners and Arabs, hence they are more reluctant to inject funds into the market," said Ashraf Abdel Aziz, Head of Institution Sales at Arabia Online.

EGX70 recorded a large fall of 2.5 per cent, compared to last week. "Egyptians comprise 70 to 80 per cent of traders in the EGX70; therefore, this indicator is directly affected by the behavior of Egyptian investors…if Egyptians are retreating from the market, EGX70 will naturally decline," added Abdel Aziz.

Of 182 listed stocks, 149 dipped and 21 rose, with 12 remaining stable, in a day that saw LE 478,538,249 of turnover.

All sectors were in the red. Real estate, construction and materials, telecommunications, banking and financial services witnessed the worst performances.

Palm Hills, Talaat Moustafa Group and Sodic continued going in south with 7.5, 2.7 and 0.8 per cent respectively. "Land is the main asset for any real estate developer, so until final court verdicts are issued regarding the fate of the disputed land, the market will not regain its trust in real estate securities," Abdel Aziz told Ahram Online.

Real estate shares are facing difficulties because of problems with land sale contracts at some companies, which has lead to some officials being taken to court. 

Talaat Moustafa Group has declined more than 50 per cent since the beginning of the year, while Palm Hills was the most affected with a drop of more than 60 per cent; SODIC fell by 40 per cent and Egyptian Resorts by about 42 per cent, according to Reuters on Tuesday.
 
Construction, a sector related to real estate, suffered heavily. Its only performer is Torah Cement  which registered a 1.1 per cent rise.

In heavyweight shares, OCI dropped by 0.3 per cent , OT by 1.1 per cent and Ezz Steel by 0.6 per cent.

EFG-Hermes declined by 0.6 per cent, while Citadel Capital decreased by 2.2 per cent.

On the gains territory, El Watany Bank of Egypt is the only vector to the north in the banking sector, with a 3.5 per cent rise.

Belton Financial Holding achieved a great result of 4.9 per cent up, in spite of the bad performance of the financial sector. "Belton should not be compared with other peers in the financial sector, as its volume of trading is minimal compared to more established securities such as EFG Hermes or CI Capital," said Abdel Aziz..

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