Egypt's shares continue slide as local institutions cash in

Ahram Online, Monday 16 Jun 2014

Main index down 1.53 percent as deadline approaches for local funds to distribute cash dividends and redeem certificates

Egypt Stock Market
Traders work at the Egyptian stock exchange in Cairo (Photo: Reuters)

Egypt stocks fell on Monday, as local institutions created selling pressure in the market on the majority of blue chips as the fiscal year approaches its end.

The benchmark EGX30 index dropped 1.53 percent to 8,522 points, while the broader EGX70 index fell 1.34 percent.

The sell-off was sparked by the approach of the 1 July deadline for local funds to distribute cash dividends and for the redemption of certificates, Eissa Fathy, vice president of the securities division at Cairo's Chamber of Commerce, told Ahram Online.

"Brokerage firms also put pressure on individual investors who trade on credit, which added to the selling pressure," Fathy added.

Egyptian investors were net-sellers to the tune of LE24.3 million, while Arab and other foreign investors were net-buyers.

The majority of EGX30's shares were in the red. Market bellwether Commercial International Bank (CIB) fell 0.48 percent to LE37.26 a share.

In the telecoms sectors, state-owned fixed-line operator Telecom Egypt (TE) saw its share price drop 2.88 percent to LE13.81. Global Telecom was down 2.14 percent to LE5.50 and Orascom Media and Technology Holding (OTMT) fell 1.49 percent to trade at LE1.32 a share.

Leading Cairo-based investment bank EFG-Hermes also saw its share price drop to LE15.12, in spite of a pending tender offer on 20 percent of its shares at the price of LE16 a share by a consortium led by Egyptian tycoon Naguib Sawiris and competitor Beltone Financial Holding.

On Monday, anonymous sources told Reuters that two Beltone board members were under investigation by authorities for alleged insider trading related to the deal, a matter which officials who spoke to the news agency refused to confirm or deny.

In the real estate sector, TMG Holding slid 2.88 percent to LE9.11 and Palm Hills Development Company fell 1.81 percent to LE4.35. Property developer Six of October Development and Investment Company (SODIC) was one of the only gainers, rising 3.12 percent to trade at LE33.37.

SODIC announced on Monday that it was considering a capital increase through a rights issue of LE1 billion, split over 250,000 shares at LE4 a share.

Daily turnover was strong, recording LE909.9 million.

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