Market Report: Egypt stocks up 2.27 per cent after week of loss

Marwa Hussein, Wednesday 17 Aug 2011

Mobinil played a leading role in today's rise, along with positive performances from both the real estate and financial sectors

Stock Exchange
Traders work at the Egyptian Stock Exchange in Cairo (Photo: Reuters)

Egyptian stocks have made their strongest gains in a week - the benchmark EGX30 up 2.27 per cent on Wednesday, with a total turnover of L.E 342.5 million.

The main index has swung between losses and mild gains since the middle of last week.

The EGX30 reached a three-year low on 7 August as Egyptian shares felt the impact of the US credit downgrade and concerns over euro zone debt.

Ashraf Abdel Aziz, head of institutions sales at Arabia Online Securities, points to some of yesterday’s blue chip performances as an introduction to today's surge.

"It was expected yesterday. The market declined yesterday but leading shares were in the green," recalls Abdel Aziz.

Most of these shares kept climbing today. In the lead was Mobinil, gaining more than 7 per cent. Although it closed at LE98.74, it exceeded LE101 during the day.

Abdel Aziz notes, "Mobinil shares were the most traded. It is one of the biggest gainers of the day, after losing 23 per cent in a week."

In general, the telecommunication sector was one of the main triggers of the market today: Orascom Telecom also increased by 3.98 per cent.

Out of the telecommunication sector, blue chips such as Orascom Construction Industries (OCI) in the real estate sector and Commercial International Bank (CIB) pushed the market up.

The former witnessed an increase of 2.36 per cent, closing at LE253.53, while the CIB share increased by more than 3.5 per cent. In general, the performance of the real estate sector and the financial sector was positive.

The decrease in price of leading shares during last week made prices attractive for buying, even for individuals who usually trade on smaller shares.

Today, they abandoned their favourite index, EGX 70, which declined by 0.47 per cent. Individuals were net buyers with 66.52 per cent.

"Usually when individuals are net buyers, they buy small shares but today they also went toward big chips," comments Ashraf Abdel Aziz.

"The big speculators on EGX 70 shares seem to be leaving the market until prices fall then they will start buying and prices will rise," explains Issa Fathy, vice president of the securities division at Cairo's Chamber of Commerce.

Turnover has been muted in recent days, with Sunday seeing the slowest trade in a decade, according to Egypt's state-run MENA news agency. This worried some analysts, showing the possibility of long term stagnation in the market.

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