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Market Report: Bourse turnover at ten-year-low on Christmas day

The stock exchange realised an impressive 1.93 per cent gain but turnover plummets to $16.5 million as foreign investors' activity tumbles

Ahram Online, Sunday 25 Dec 2011
Bourse
Staff at Egypt's stock exchange (Photo: AP)
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Egypt's stock exchange finished Sunday in the green but turnover plummeted to a ten-year low as foreign investor activity dropped during the holiday season.

The main benchmark, EGX30 gained 1.93 per cent to close at 3,683.6 points. The broader index, EGX70 also gained by 2.8 per cent but remained below the 450 points level at 424.67.

"The gains that the bourse realised today are a reflection of the calmness that finally hit Egypt's streets," says Ashraf Abdel Aziz, head of institutions sales in Arabeya Online Securities.

The bourse had experienced losses of over 200 points on the back of violent clashes earlier this month between protesters and security forces in downtown Cairo, leaving more than 12 dead and hundreds injured.

"The market was expecting further violent outbreaks during the Friday protests; luckily they passed peacefully so the market is acting accordingly," Abdel Aziz adds.

Total market turnover reached LE98.8 million ($16.5 million), its lowest levels in ten years, mainly due to poor participation from foreign investors. This adds to the struggling bourse's grievance that has lost close to 50 per cent of its value since the beginning of this year.

"The market has been suffering from low turnover over the course of the past couple of months. Something drastic needs to happen to get over this stumble," Abdel Aziz added.

He explains that prices have to reach a certain level whether upwards or downwards to attract new buyers or sellers to the exchange.

Non-Arab foreign investors' share of trading marked a meagre 5.37 per cent while Egyptian investors made up 91 per cent of the total. Egyptians were also the net buyers at LE10.5 million.

Almost all blue chips gained today, with Orascom Construction Industries, Telecom Egypt and Commercial International Bank (CIB) closing up at 2.49, 1.95 and 1.66 per cent, respectively.

CIB's gains came despite the downgrade of its local currency deposit ratings by Moody's Investment Services, along with four other banks.

Citadel capital, a leading private equity firm, gained 2.68 per cent to close at LE2.68 per share.

The company announced today it made a standalone net loss of LE20.7 million ($3.5 million) in the third quarter compared with a net loss of LE29.6 million in the same period last year.

Its net loss for the first nine months this year reached LE446.6 million versus LE160.6 million for the same period the previous year.

"The market is not as affected by financial results as it used to be. Now the political and macro-economical status of Egypt has more effect on the movement of stocks," Abdel Aziz added.

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