Egypt stocks extend their gains, but some see problems ahead (Photo: Reuters)
Egyptian stocks extended their gains on Wednesday as parliamentary debates raged on and news of overseas emergency funding to bridge the country's budget gap helped fuel investor optimism.
The benchmark EGX30 rose 0.86 per cent to close the session at 4,688 points. Its second consecutive rally brought the Bourse's year-to-date gains to 28 per cent, placing it among 2012's top global performers.
"Investors were focusing on specific stocks and injecting their money into them," said Ashraf Abdel-Aziz, head of sales at Arabeya Online Securities.
"News of financial aid packages from the EU and the World Bank (WB) also had a positive effect on the market."
Earlier on Wednesday, a statement from Egypt's finance ministry said the EU and WB were preparing a $1.15 billion "urgent aid package" to help bridge the country's budget gap. Officials did not specify whether the funds are loans or grants, calling them only "emergency aid with facilities"
From the day's 179 listed stocks, 78 gained value and 84 declined in trade worth around LE464.2 million. The broader EGX70 edged 0.13 per cent, in a clear indication of investors' preference for higher-caps.
Egyptians dominated the day with 76.6 per cent of trade and were net-sellers of a marginal LE8.69 million worth of stock.
Ezz Steel, which reported a leap in third-quarter net income on Tuesday, was the biggest high-cap gainer, up 3.7 per cent.
Orascom Telecom Media climbed 5.5 per cent and real estate group Palm Hills surged 7.2 per cent.
Egypt's largest listed stock, Orascom Construction Industries (OCI), edged 0.09 per cent amid rumours that the firm may see a stock-split like that of stablemate Orascom Telecom.
The country's recent parliamentary elections, which were widely praised for being fair, are likely to boost foreign interest in Cairo stocks, traders said.
"As long as the process of reestablishing the state's major institutions continues, we are most likely going to see more gains in the Egyptian market," said Ahmed Khalil, trader at Cairo Capital Securities.
But others warned that Egypt's economy was still in crisis, with foreign reserves sliding and the government struggling to finance its budget deficit.
"I don't think we will have a long rise in the market," said Mina Iskander of Egyptian investment bank EFG-Hermes.
"It will go up for few weeks over that feeling of optimism, but could go down later when companies start releasing their annual earnings, which given the current political situation are not expected to be good."