Market Report: Egypt's Bourse edges up after troubled companies reshuffle executives

Salma El-Wardani , Tuesday 17 May 2011

Changes among leading personnel and a regional tour by the market's chairman help fuel another day of solid gains

workers at Egypt's stock exchange market are seen in the trading hall in Cairo (Photo: AP)

Egypt’s stock market  finished Tuesday up 1.49 per cent , in what analysts saw as a result of resignations of top executives at the Bourse’s leading listed companies.

The EGX30 continued its upward trend for the third consecutive day as the main index climbed to 5,203, gaining more than 200 points in 48 hours.

Of 183 listed stocks, 105 gained and 65 declined in LE568.8 million worth of stock trades, with all sectors ending on a green note except for industrial goods and services, automobiles and healthcare and pharmaceuticals.

“Changes in the top executive posts in the Bourse’s heavyweights gave investors confidence and led to the surge we see in the stock market this week,” said financial analyst Wael El-Nahhas.

Egyptian steel magnate Ahmed Ezz, a top official in the party of ousted president Hosni Mubarak who is being investigated for illegally taking control of al-Dekheila Steel and monopolising Egypt's steel market, quit as chairman of Ezz Dekheila Steel the company said on Monday.

Following the resignation, shares in Ezz Steel, Egypt’s largest steel producer which holds a 55 per cent stake in Ezz Dekheila, rose 0.22 per cent, following a 3 per cent increase in yesterday’s session.

“Although Ezz was not strongly involved in the company’s daily operations, his withdrawal renewed investors’ trust,” El-Nahhas said.

Also yesterday, Egyptian business tycoon Naguib Sawiris stepped down as executive chairman of Orascom Telecom, to be replaced by the company’s CEO, as the billionaire decided to focus on social and political work. He is “aiming to play a role in the transformation of post-revolution Egypt into a civil democracy", according to a statement.

“Marriage between business and politics always worries investors, and Sawiris' decision killed any worries,” explained El-Nahhas.

Orascom Telecom shares rose 2.17 per cent following the announcement.

Top gainers included Egypt's three main real estate companies -- TMG Holding which surged 8.99 per cent, Palm Hills Development, up 8.67 per cent, and Six of October Development & Investment (SODIC), up 7.77 per cent.

Egyptians and foreigners were net-sellers of LE19.3 million and LE9.8 million respectively. Arabs were the only net-buyers comprising LE29.1 million of the market.

“The Bourse chairman's tour in Gulf Countries resulted in the strong presence of Arabs in today’s session, as it helped dispel fears and increase the overall market turnover since Sunday,” said El-Nahhas.

The head of the Egyptian stock exchange Mohamed Abdul Salam has begun a tour of Gulf countries aiming at revitalising trading on Egypt's troubled stock market by attracting more Arab investment.

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