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Market Report: Egypt stocks slip 0.8 per cent on appointment of new police chief

Midday announcement of a controversial minister prompts a dip for the troubled Bourse as foreign investors shift position on major stocks

Ahmed Feteha, Wednesday 7 Dec 2011
Egypt exchange
Investors exercise caution after new Interior Minister is appointed (Photo: AP)
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Egypt's stocks slipped into the red Wednesday as a controversial appointment to the position of the country's security chief prompted a fresh bout of investor caution.
 
The benchmark EGX30 dropped 0.76 per cent to close at 3,993.73 points, a performance mirrored almost exactly by the broader EGX70.
 
The main index started the day firmly in the green, rising to 4,035 points, but around noon  took a downturn.
 
"The news about the new formation of the ministry, especially the name of the Minister of Interior, raised concerns that unrest might return to the streets," said Mohamed Metwally, a trader at Prime Securities.
 
The newly appointed Minister of Interior, Mohamed Ibrahim, last served as head of the Giza security governorate and is said to be responsible for a violent crackdown on Sudanese refugees occupying a public garden in Mohandessin in 2005.
 
Ibrahim's track record has raised fears of protests against his appointment, which could lead to a resurgence of violence on Cairo's streets, Metwally said.
 
He also pointed to large transactions made by foreign investors, saying their shift on position for major stocks also caused the day's drop.
 
Two block trades were carried out on Orascom Construction Industries (OCI) and Commercial International Bank, amounting to LE35 million and LE32 million respectively.
 
OCI and CIB are the market's two largest shares and made up one third of the day's LE415 million total turnover. They dropped by 1.61 per cent and 1.52 per cent, respectively.
 
Foreign investors made up 44.68 per cent of the day's trade, net selling LE46.9 million. Non-Egyptian Arabs were also net-sellers but made up a meagre 3.33 per cent of overall trading.
 
Egyptians were the only net-buyers, scooping up LE55.9 million worth of stocks in a renewed show of confidence.
 
"Egyptians have got used to market fluctuations -- their heavy participation in trading reflects profit hunting more than anything else," Mewally explained.
 
"They made use of the day's fluctuations and some were able to profit from it."
 
Orascom Telecom, one of the largest companies on the exchange, continued to see a freeze ion its shares following a request from company management.
 
The company is currently being split into two units: Orascom Telecom Holding (OTH) and Orascom Telecom Media and Technology.
 
Despite the action, it was reported today that UK trade on the share is still going strong. A spokesman said OT has no way to force a suspension on the London exchange.
 
The Egyptian Gulf Bank, one of the few dollar denominated shares, was the third most traded stock at LE42.8 million. Two block trades took place early in the morning totaling LE32 million.
 
From the 181 shares traded on Wednesday, 114 lost value and 53 finished in the green.
 
Among the blue chips that declined were the Talaat Moustafa Group, EFG Hermes and Telecom Egypt -- they fell 0.54, 1.25 and 2.23 per cent respectively. 
 
It was announced today that the chairman of the Talaat Moustafa Group, Tarek Talaat Moustafa, failed to win the parliamentary seat he was running for in Alexandria. The seat has been occupied by a member of his family for several generations.
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