Egypt's stock exchange continued its positive streak on Tuesday as investors remained optimistic about the prospects for political stability.
The main index EGX30 gained 1.58 per cent to finish at 5,429. It has gained some 50 per cent so far this year.
"There are many reasons the market is doing well during 2012," Mohamed Metwally, equity trader at Prime securities said. "The political scene has stabilised and companies are doing well. Therefore, the market is behaving accordingly."
Metwally expects the EGX30 to reach 5,600, a major resistance level, by Wednesday or Thursday.
Some traders have expressed fears that the market will witness a severe correction at that level, but Metwally dismisses such fears.
"So what if the market reached 5,600 then dropped afterwards. There is enough liquidity in the market to withstand such hits."
Average turnover levels have increased significantly since the start of the year compared to 2011. On Tuesday, total traded volume reached LE789 million.
The coming period should be quite positive for the exchange, according to Metwally.
"We have company results and possible dividend distribution across the market and this will add to the already increasing interest in the market," he added.
One example of the soundness of Egyptian business was demonstrated today by real estate developer SODIC.
The company said in a statement that it managed to sell all of the 160 units offered in its West-Town project for LE193 million. Total contracts sales are LE420 million in 2012.
SODIC's share price was quick to react to the news, gaining 7.92 per cent, the second biggest gainer in today's session. The share closed at LE19.22.
Egyptian investors made up three quarters of the day's activity, net-selling at LE29 million.
Non-Arab foreigners contributed to 16 per cent of trading activity and were also net-seller at LE4.7 million.
"It seems that foreigners are re-entering the market, especially in the Commercial International Bank (CIB), which is one of their favourite shares," Metwally added.
CIB was the most traded share in today's session at LE91 million, gaining 2.7 per cent to close at LE25.97 per share.
Market leader, Orascom Construction Industries (OCI), gained 2.08 per cent to close at LE275.65 per share.
Out of 186 shares traded on Tuesday, 107 gained while 64 dropped.
Juhayna Food Industries, Egypt's largest dairy company, saw its share price drop 1.03 per cent on lower than expected financial results. Juhayna said on Monday its 2011 net profit dropped 18.4 per cent below 2010 to reach LE186 million.
The broader EGX70 index, also witnessed gains of 0.97 to close at 531 points.
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