A staff member of Egypt's stock exchange follows a monitor at the trading hall (photo: AP)
After a dramatic trading session, the Egyptian bourse finished the trading week with a slender growth. The EGX30, the exchange’s main benchmark, gained 0.05 per cent to close at 5,005 points.
Out of 177 stocks traded today, 90 showed gains while 74 closed in red.
“Egyptian institutions were the catalyst for the growth in today’s session,” said Ashraf Abdel Aziz, head of institution sales at Arabeya Online Securities.
Egyptians and Arabs were net buyers to the tune of LE61 million. This comprised 71 per cent of trades made in the four-hour session.
The relatively high trading volume today also stimulated the market into heaving up; hitting the LE530 million mark.
“While the trading volume is still lower than the market’s normal trend; it is still higher than the extremely deteriorated levels it reached last week,” Abdel Aziz concluded. “We could be seeing an upward trend if trading volumes persist at today’s and yesterday’s levels.”
The trading day commenced on a decline in most sectors driven by negative earnings in major stocks. However, the market started to recover to close in the green.
Big caps are holding their grounds for fundamental and technical reasons, say analysts.
The Commercial International Bank’s (CIB) stock astonishingly gained 1.16 per cent despite announcing a 42 per cent decline in Q1 profits today.
“At the beginning, the market reacted negatively to the CIB news; however, it was able to absorb this hit through the buying flow by Egyptians and Arabs,” adds Abdel Aziz.
“CIB is rebounding to its regular price range after the declines it witnessed since the beginning of this year. Traders are heavily relying on the technical analysis of the stock rather than the fundamental [financial] outlook of the bank,” Shady Bahaa, a technical analyst at dynamic securities, comments.
CIB’s stock market value has deteriorated significantly in the aftermath of January 2011, following news of its possible connection to the Mubaraks. Most sectors witnessed growths today with the exception of Financial Services, Telecommunications and Food and Beverages.
The Basic Resources sector gained most with a 3.6 per cent hike on the back of Al Ezz Steel and Ezz Dekhela, despite the two stocks being affiliated with Ahmed Ezz, the former NDP official currently imprisoned on charges of corruption.
“Ezz stocks are the most stable and the most likely to recover out of all the troubled stocks in the Exchange,” indicated Abdel Aziz. “Unlike Palm Hills, TMG and EGTS, the problems these two companies face are not related to the companies' main activity; it is an ownership dispute rather than a business dispute.”
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