Market Report: Bourse gains despite fears of Islamist landslide
Ahram Online, Wednesday 30 Nov 2011
EGX30 main index crosses 4,000-point mark as Telecom Egypt and Talaat Mostafa Group - along with a number of other big caps - outperform expectations


Egyptian stocks traded in the green for the second consecutive ‎day on Wednesday, capitalising on orderly and trouble-free ‎parliamentary elections.‎

The benchmark EGX30 index gained 0.82 per cent for the day ‎to close at 4,020 points. The broader EGX70 index similarly rose ‎by 0.92 per cent.‎

As for preliminary polling results suggesting a landslide victory ‎for Islamist parties, capital market expert Mostafa Badra says it ‎remains unclear how the market would react to such a ‎development.‎

‎"The important issue here is that the electoral process continues ‎in a calm and violence-free manner," he said. "High voter turnout ‎and the polls’ orderly organisation sent a very strong message to ‎the market about Egypt's political future."‎

‎"Such results have already brought many Egyptian investors ‎back to the market," Badra added. "But we’ll have to wait and ‎see what the Islamists’ attitude will be towards direct and indirect ‎investment.”‎

Real estate development company Talaat Mostafa Group ‎‎(TMG), whose chairman Tarek Talaat Mostafa is contesting ‎elections in Alexandria, was the highest traded share on ‎Wednesday. TMG shares generated LE41.1 million ($6.85 ‎million) worth of trades, accounting for 14 per cent of the day's ‎total turnover of LE287.3 million.‎

Last week, TMG's contract for its Madinaty development project ‎was ruled valid by an Egyptian court, signalling an end to a long-‎running legal battle over the $3 billion scheme.‎

‎"If the market continues its upward trend, TMG could be one the ‎highest gainers in the coming period due to its high liquidity and ‎positive post-ruling prospects," said Ashraf Abdel Aziz, head of ‎institutional sales at Arabia Online Securities.‎

Blue chip Telecom Egypt (TE), meanwhile, jumped a whopping ‎‎6.72 per cent to close at LE14.14 per share. Abdel Aziz said that ‎TE’s gains represented a rebound after the company’s share ‎price had recently fallen to very low levels. ‎

Egyptians accounted for 58.46 per cent of the day’s total trades, ‎becoming net buyers at LE1 million. Arab investors, meanwhile, ‎were main buyers at LE10.5 million, accounting for 8.1 per cent ‎of total trades.‎

Foreigners, on the other hand, represented net sellers, ‎accounting for LE11.42 million in trading.‎

‎"We saw foreign investors buying when the market was ‎declining, and now they’re selling to realize gains on their ‎investments," said Badra. "If the political scene remains calm, ‎we could see a return of foreign capital to the market."‎

The two largest shares in terms of market capitalization, ‎Orascom Construction Industries (OCI) and Commercial ‎International Bank (CIB), came in second and third in terms of ‎daily turnover at LE24.2 million and LE20 million, respectively.‎

OCI dropped 0.49 per cent to close at LE216.78 per share, while ‎CIB gained slightly, rising 0.78 per cent to finish at LE14.14 per ‎share.‎

Six of October Development & Investment (SODIC), Egypt’s ‎third largest real estate developer, fell 1.55 per cent to close the ‎day’s trading at LE11.47 per share. On Wednesday, the ‎company posted third-quarter net losses of LE38 million.‎

Also on Wednesday, a Cairo criminal court was expected to ‎open a case against SODIC for alleged corruption.‎

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